Maryland losses disallowed on federal return when filing non-resident MD return

[qadro]

Hi,

I had an overall rental loss, which shows up as $0 on my federal return since it's disallowed.
One of the rental partnerships was in Maryland and per K-1 it yielded a ~$15000 loss. When filing my non-resident Maryland return the only way I can force TurboTax to allocate -$15000 to Maryland is to tell TurboTax that I had +$15000 non-Maryland gains (which is incorrect - other states had losses too). These made-up gains are then added in "Additions to Income" which incorrectly increases my "Maryland AGI".

Am I doing something wrong? Should the federal number be the actual loss instead of $0? Should my Maryland income + non-Maryland income not be equal to federal income?

I've spent weeks diagnosing this, any help is really appreciated.

[ThomasM125]

On the Maryland non-resident form 505 you enter your rental income equal to the net taxable rental income on your federal tax return. So, since that is $0 in your case, there will be no entry for it on the Maryland tax return.

It will not appear on the Maryland return and that is how it should be reported. You can mail in your Maryland tax return and include a copy of the federal return if you think it will allow the return to be processed better.

[qadro]

Thanks for your response, I see. But this way how do I carryover my rental losses to decrease my MD tax on the gains in the year when I finally sell the property?

[ThomasM125]

The un-allowed rental losses get carried over on your federal return, so in the year you dispose of the property you will use them against rental income reported in that year. If you end up with a deductible loss in that year, it will be reflected as such on your Maryland tax return, as it will appear as a loss on your federal tax return.