Alabama Tax on inherited property losses

We had loses on the sale of two inherited properties in the amount of $18,000 and in the federal return we are allowed to deduct $3,000 each year. However on the Alabama return it takes the full $18,000 deduction for the year 2020. Is this correct?

posted

Yes. Under Alabama law, the entire gain is taxable, and the entire loss is deductible, in the year in which it occurs.

Refer to page 22 of the Form 40 Booklet TY 2020.

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I've no W2 income and no long-term capital losses. Rental income is $20,000. I sell my rental property held for 4 years for a net gain of $600,000. How much tax I owe?

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Alabama Tax on inherited property losses