topic 2 States Filing Required? in State tax filing

2 States Filing Required?

wsibo — Wed, 17 Mar 2021 14:04:13 GMT

I live in North Carolina and own a rental home in another state (Colorado). Must I file a state return with Colorado also, even if the rental is a small lost, tax wise.

Re: 2 States Filing Required?

JotikaT2 — Wed, 17 Mar 2021 14:23:14 GMT

Yes.

Colorado requires that you file a nonresident income tax return there if you have any income generated from Colorado. While your rental may have an overall loss, you are generating income in the form as rental income and therefore, meet the filing requirements.

CO nonresident filing requirement

Examples of CO source income

Re: 2 States Filing Required?

GTStafford — Mon, 10 May 2021 23:32:15 GMT

I moved to South Carolina in 2019 but closed on selling my house in Colorado January 21, 2020 at a considerable loss, since we had made 2 large additions as well as improvements. None of my other income is from the state of Colorado. Do I need to file a Colorado return? The home was my primary residence for about 22 years, never rented. I am retired and widowed for several years.

Re: 2 States Filing Required?

ToddL99 — Mon, 10 May 2021 23:48:43 GMT

No, you wouldn't need to file a CO tax return under the circumstances you outlined. You were not a resident of CO in 2020 and did not have any CO-source income (a loss on sale of personal residence would not be considered "income").

From Individual Income Tax | Filing Requirements

"You must file a Colorado income tax return if during the year you were:

A full-year resident of Colorado, or
A part-year resident of Colorado with taxable income during that part of the year you were a resident, or
A nonresident of Colorado with Colorado source income,

AND

You are required to file a federal income tax return, or
You have a Colorado income tax liability for the year.