Yes, you should be able to take the losses against your rental income.
If you used TurboTax last year, the passive loss should have carried over automatically. If it didn't, please follow these steps:
- Click on Federal > Income & Expenses
- Under S-corps, Partnerships, and Trusts click on the Revisit box next to Schedule K-1.
- Click Yes on the next screen, Schedules K-1 or Q.
- On the Tell Us About Your Schedules K-1 screen. Click on the Start/Update box next to the appropriate K-1
- If you have already entered K-1 information, you will see the K-1 Summary screen. Click Edit to continue with the existing form entry.
- On the screen, Did you participate, click the NO box.
- As you go through the screens to enter the K-1, you will see a screen, Describe the Partnership. [For an S-Corp the screen will read Other Situations.]
- Mark the box I have passive activity losses carried over from last year and click Continue.
- On the next few screens, you will be asked to enter the carryovers for both regular income and AMT.
Without knowing the details of your situation, it's hard to say why your CPA says you should file a CT nonresident return. Is the rental income more than the gross income limit? According to the instructions for the CT-1040NR/PY:
You must file Form CT‑1040NR/PY, Connecticut Nonresident and Part-Year Resident Income Tax Return, if you were a nonresident or part‑year resident of Connecticut in 2019 and any of the following is true for the 2019 taxable year:
• You had Connecticut income tax withheld;
• You made estimated tax payments to Connecticut or made a payment with Form CT‑1040 EXT, Application for Extension of Time to File Connecticut Income Tax Return for Individuals;
• You had a PE Tax Credit and your PE did not elect to remit composite income tax payments on your behalf;
• You were a part‑year resident who meets the Gross Income Test or who had a federal alternative minimum tax liability; or
• You were a nonresident with Connecticut-sourced income who meets the Gross Income Test or had a federal alternative minimum tax liability. See Connecticut-Sourced Income of a Nonresident, on Page 10.
If none of the above apply, do not file Form CT‑1040NR/PY
Gross Income Test
You must file a Connecticut income tax return if your gross income for the 2019 taxable year exceeds: • $12,000 and you are married filing separately;
• $15,000 and you are filing single;
• $19,000 and you are filing head of household; or
• $24,000 and you are married filing jointly or qualifying widow(er).
