RENTAL INCOME FROM ANOTHER STATE

[mommybearo]

I have rental income in another state from where i reside.    I pay state taxes on that income in the state that it incurs.   shouldnt that income be deducted from my residence state taxes?  I can't figure out where i would enter that as an adjustment.  

[pk]

@mommybearo , generally what should happen :

(a) you prepare  the non-resident return, recognizing the rental income ( you have it on Schedule-E for your federal) and compute the taxes due thereon

(b) then you prepare the return for your resident state.

This should result in your  resident state giving you a credit for taxes already paid to the non-resident state.

Is that what you have done ?

[mommybearo]

I don't do my non resident state return on turbo tax, as turbo tax charges for an additional state return.    is there a way to adjust my resident state return without doing the non resident return on turbo tax?

[pk]

@mommybearo , generally you should be able to prepare the  Non-Resident state  in another software or by hand and then  on your resident state  exclude  that income or the tax thereon.  Can you tell me the  resident and non-resident states and I can be more  specific where to do the deduction/exclusion.

In my earlier life, I had CA and MI and I used to exclude the  taxes paid to CA  from MI as taxes paid to another state. California on the other hand allows to exclusion of income sourced to another state.  Therefore need to know the states involved.

[mommybearo]

RESIDENT STATE IS CALIFORNIA.    NON RESIDENT STATE WITH RENTAL INCOME IS KANSAS.

[pk]

@mommybearo , then I would prepare the KS return  and then for the California show the out of state  source of the income -- thereby no taxation from CA    but no credits either.

I will try this scenario to make sure  and come back later.

[mommybearo]

My ks return wont be done thru turbo tax.  Where would I enter the out of state income to be adjusted in my ca return?  The only place I found under adjustments would be other income. Would that be ok?

[BillM223]

I am sure that pk meant "prepare the KS return" not through TurboTax, since you had already said that you were not doing that, but that you should just do your KS however, and then come back to TurboTax and start your California interview.

My test does not have a Schedule E (much less in another state) so I don't know if you will see a specific screen in the California interview about the Schedule E info (to allow you to adjust it), so it sounds like the Other Adjustments to Income is the right place to put it.