Michigan State Schedule 1 Line 4

Forum|Forum|4 years ago
March 20, 2022
1 reply
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If you have rental property out of state and take a loss on it, why does this hurt/reduce the amount you get back or increase the money you owe to the state of Michigan? It is a loss, so it should not negatively affect you?

MaryK4

Level 15

Michigan does not conform to the federal treatment of bonus depreciation, so if you had any depreciation adjustments, it is possible this would change your loss on your Michigan return.

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ptranchidaAuthor

Level 2

I do not understand your answer? TurboTax asks did you have a out of state rental property that had either a loss or income. If I enter a loss, my Michigan Tax return went from positive number/return to a negative/owe return. It did not ask for any depreciation or anything else. If I have rental property out of the state, I have to indicate if it took a loss or made a profit and can not just put zero in for this?

RobertB4444

Level 15

It's your passive losses. Michigan doesn't allow passive loss carryforwards and limits passive losses on rental income. The rules are kind of dense but that's the issue.

Here are the rules (dense as they are). The relevant stuff is on page 5.

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