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wtaxret
New Member

Can we claim a section 988 forex loss on our state tax (NJ) return ?

We have section 988 forex losses. We are reporting these as ordinary losses in our federal return with TT using these instructions

https://ttlc.intuit.com/questions/2591167-forex-gains-and-losses

This is entered on line 21 in 1040, and our Federal return properly deducts this ordinary loss from income to get AGI. But our state return (NJ) does not deduct this loss from  our NJ income. Is this expected under NJ tax laws or do I have to do something special to get TT's NJ state return to deduct this loss ? 

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1 Reply
IsabellaG
Expert Alumni

Can we claim a section 988 forex loss on our state tax (NJ) return ?

Yes, this is the way NJ taxes income. New Jersey does not allow losses from one category of income, such as capital losses to offset other categories of income such as wages. NJ also doesn't allow capital loss carryovers to future years.

http://www.state.nj.us/treasury/taxation/njit9.shtml

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