Do I need to file a state return for a k-1 I received?

[Shock976]

I'm a limited member of an LLC that holds investment real estate in Colorado. I live in California and received a 2022 Colorado K-1. Do I also need to file a state return for this K-1? My K-1 is reporting a loss.

[JamesG1]

This Colorado Department of Revenue Taxation Division website states:

Nonresident Definition

A nonresident is an individual who did not reside within the boundaries of Colorado at any time during the tax year. However, the person may have temporarily worked in Colorado and/or received income from a source in Colorado. A nonresident is required to file a Colorado income tax return if they:

• are required to file a federal income tax return, and
• had taxable Colorado-sourced income.

@Shock976 

[Shock976]

Thank you for responding to this question @JamesG1. I don't have income from CO, but rather a loss which resulted in a reduction of my basis in the partnership. I assume I'd still file a state return but am not sure what to enter for this question on the state return: 

"Enter the following information for each fiduciary (trust) or partnership adjustment from your Colorado Schedule K-1 that increases the amount reported on the corresponding federal Schedule K-1."

This section as well I'm not sure how to proceed: 

Schedule K-1 Decreases

Enter the following for each fiduciary (trust) or partnership adjustment from your Colorado Schedules K-1 that decreases the amount reported on the corresponding federal Schedule K-1.

Enter amounts as positive numbers.

[Shock976]

Would it be beneficial to utilize a turbotax tax preparer to get help with the K-1? It doesn't seem too difficult, but I want to make sure that the numbers I entered in my federal return are populating to the state(s) correctly and haven't been able to preview my return without paying for the filing first. 

Appreciate the help out there. 

[JamesG1]

The questions are referring to instances where a separate Colorado K-1 may differ from the Federal K-1.

Tax Expert @Irene2805 explained it well here.

1.  If the information on the state K1 is same as the Federal K1, you do not report the state K1--the information will flow from the K-1 you entered on the federal side.

2.  If there are not the same, then you have to enter the difference as adjustments to Federal Income in the state section of the program.

• If the amount on the state K-1 is higher than the federal K-1, enter an addition ("Increase amount") to federal income on your CO return.
• If the amount on the state K-1 is lower than the federal K-1, enter an subtraction to federal income on your CO return.

An upgrade to TurboTax Live Service is still available to you.  It just depends upon what makes you feel comfortable.  Pricing and details may be found here.

@Shock976 

[Shock976]

Thank you very much @JamesG1 that makes perfect sense. I used the live help option last year and didn’t get the assistance to the level I felt it was worth the fee. Therefore this year I wanted to try this forum. 

The return has become more complicated so it may be time to get professional help on the future. For now though it’s working fine for me this way. Thank you very much for the help.

The only thing I need to fix now is a K-1 that was issued to me as an individual but should indicate my IRA holding the investment. I understand without this indicated on the K-1 that I would need to report the K-1. However, it’s clear that the K-1 is issued to my IRA custodian, but incorrectly indicates the partner is an individual. This negates the benefit of using IRA if I have to file.