k-1 and state taxes

[ghettodawg]

Hello turbotax community,

I can't find a clear answer to this question:

I am a limited partner in various LLCs; they mostly buy and operate multifamily apartment complexes (usually one LLC owns one apartment complex) .

How to determine in which state(s) to file "nonresident" taxes for a given K-1?

Example 1:

I live in state A, the LLC is registered in state B, it owns an apartment complex in state C. It's not a publicly-traded company. The K-1 does not contain any "state K-1" forms. The K-1 shows a profit for this year.

Example 2:

Same as above, but the LLC owns apartment complexes in many states.

Example 3: 

Same in (1), but the K-1 shows a loss this year. Do I have to file nonresident state taxes if I have a loss?

Thank you!

your ghettodawg

[DavidS127]

For Example 1, you file a nonresident return in state C.

For Example 2, you file a nonresident return in each state where rental property generated income, and any state where the rental activity generated a loss if that particular state requires a tax return whenever a rental activity is carried on in that state.

For Example 3, it depends on the state.  Most states require a nonresident return only when there is income, but the requirements vary by state.

I would also recommend reviewing the rules for the state in which each LLC is "based", in case that particular state taxes partnership/LLC income reported by the LLCs operating in that state.

[szlateva]

What about  if Example 1 has K-1 for state B and C:

Example 1:

I live in state A, the LLC is registered in state B, it owns an apartment complex in state C. It's not a publicly-traded company. The K-1 HAS  "state K-1" forms for state B and C. The K-1 shows a profit for this year.

Where should I file?

[DavidS127]

You will file a state return in states A and C, and if state B taxes state B-registered LLC income for nonresident partners, you'll also need to file a state tax return in state B.

[szlateva]

Thank you!

What about if the state B taxes for the B-registered LLC for nonresident partners say that  " Nonresident's share of state B taxable income (loss):  $0", do I still need to file in state B?

[DavidS127]

Probably not, but the only way to be sure is to check that state's rules about the taxation of LLCs registered in that state.

@szlateva