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Level 2
posted Mar 1, 2020 3:11:04 PM

Does Turbo Tax distinguish rental properties in two different states in State Tax filing?

I live in Washington State (for the whole year) and have two rental income properties: one has net loss in Washington State and the other one has net income in California.  I input both rental incomes for my Federal tax.  Since Washington State does not have income tax, my next step is to file California State tax. 

 

However, Turbo Tax automatically transfers my both rental incomes into California's filing and includes the Washington State property's net loss in the 'California Worksheets'.  Should the Washington State property rental loss be excluded from 'California Worksheets' as its source income is not from California? 

0 5 1383
5 Replies
Expert Alumni
Mar 1, 2020 3:31:39 PM

Yes, your Washington State property rental income/loss should be excluded from your California state tax return.  There should be a page in the TurboTax California return where you allocate various types of income/losses and gains.  Be sure to only include your California rental income.

Level 2
Mar 1, 2020 8:17:23 PM

Hi DavidD66,

 

Thanks for your reply.  Could you please share more details on how to allocate various types of income/losses and gains in TurboTax Premier? 

 

My two rental incomes automatically show up in 'Rental or Royalty Adjustment' under 'Business'.   I was not able to find any ways for me to allocate or remove my WA rental income from California.

 

Best regards,

David

Expert Alumni
Mar 2, 2020 1:16:28 PM

To include only your CA rental on your CA nonresident return, please follow these steps:

  1. If you have not yet completed your CA nonresident return, as you go through the return, you will come to a screen, Enter your profit or less from Rent, Royalties, etc.
  2. On that screen, the Federal adjusted amount will be listed.  Enter the portion of the amount that's attributable to your CA property.
  3. Continue through the rest of the CA return.

If you've already completed your CA return, go back in.

  1. On the screen, Your 2019 California Taxes are ready for us to check, click the box next to  Income and Adjustments.
  2. Click the Done with Adjustments box at the bottom of the screen.
  3. The next screen should be Nonresident Adjustments.  Click Continue,
  4. Continue to the rental Real Estate, Royalties, etc screen and make your adjustment there.

Level 2
Mar 2, 2020 6:51:00 PM

Hi Irene2805,

 

Thanks. This is helpful, and I am able to input my amount now.  It would be great if TurboTax can have an easier way to distinguish California and non-California rental income based on the property.  Please provide my friendly feedback to your product team.  We all love TurboTax so much.

 

Best regards,

David

Level 3
Apr 21, 2020 1:24:37 PM

Hello-I have this same issue with reporting CA profit or loss for rental property as I have property in VA and CA.

As you stated Turbotax does show the Federal Adjustment amount (in my case -$17,755).  You said to allocate the portion that is attributable to CA property.  When I view these numbers on my Federal Sch E, I find my VA property had a positive (profit) while my CA property had a negative (loss).  The total Federal Adjustment being shown is the sum of the two (VA profit, CA loss).  It would seem I should deduct the VA profit from the Federal Adjustment amount, which will result in my entry being larger (-$25,258) than the Federal Adjustment amount.  Am I viewing this correctly?

Thanks

Harold