Help to file hawaii non-resident return

Forum|Forum|7 years ago
June 6, 2019
2 replies
1 view

Hi,

I am California resident and own a rental property in Hawaii. I had a overall loss in 2017 due to repair etc. Do I still need to file non-resident return in Hawaii?

I went ahead and purchased TurboTax Hawaii state tax return, only relevant item is it asked me to enter rental income. Should I type in 0 (since a loss) or the actual rental income before deducting the cost? If later, where should I enter the cost for repair?

Thanks

TurboTax Premier Windows

vfellows

Level 5

When filing a resident return for the state you live in and a non-resident return for another state's income, be sure and do the federal return and then the non-resident state return first. Then do the resident state return.

In the non-resident state interview, it will ask you about income based on the federal tax return. The rental loss/gain comes from the federal return, Schedule E, Supplemental Income and Loss and is reported on Line 17 of your Form 1040. The interview asks what portion of all reported income belongs to the non-resident state.

After answering the interview questions for the non-resident return, (in your case Hawaii), you can start your resident return. In the resident return the interview will ask questions about income which is taxed by both states.

If your resident state (CA in your case) has a credit for taxes paid to another state, Turbo Tax will ask you questions in the resident state to calculate the credit allowed for taxes paid to the non-resident state. In your case, if you pay no income taxes to the non-resident state, there will be no credit on the resident return.

lindaruthe

Level 3

I have same question. I have an annual loss on a Hawaii property after deducting management fees, repairs, HOA fees and depreciation. When I fill out the Turbo Tax form, it only asks me for the "Gross Receipts." No where does it ask me for my expenses. Don't expenses matter? Or does Hawaii have an automatic tax on Gross Receipts even if you are losing money. Turbo Tax has no explanation for this that I can find.

TomD8

Alumni - Champ

@lindaruthe :

Are you a Hawaii resident? Line 54 of Hawaii Form N-11, the resident tax return, asks for your "Hawaii Gross Rents." But that information is entered after your tax has been calculated (see page 4 of Form N-11). Your net rental income or loss will already be included in your federal adjusted gross income that is reported on Form N-11.

http://files.hawaii.gov/tax/forms/2018/n11_i.pdf

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

lindaruthe

Level 3

I have an annual loss on a Hawaii rental property after deducting management fees, repairs, HOA fees and depreciation. When I fill out the Turbo Tax Hawaii State annual tax form, it only asks me for the "Gross Receipts." Nowhere does it ask me for my expenses. Don't expenses matter? If I am entering the Gross amount, it seems that I should be entering the Expenses somewhere. But where should I be entering them?

Or, does Hawaii have an automatic tax on just Gross Receipts even if you are losing money? My brain has a hard time accepting the idea of paying a tax on a loss. Is this their way of collecting the "Excise Tax?" Because it is not computed as an "Income Tax." Is the "Excise Tax" a substitution for the "Income Tax" or a supplemental additional tax?

Also, must I pay the annual Hawaii excise tax in addition to the Hawaii State Income tax? Or is it an either/or situation. or Both?