North Carolina total Income does not include Interest and Dividends

[goyal_raj]

Hi,

I moved to North Carolina in mid 2021 and calculated my interest and dividends after my move date and attributed the income to North Carolina. Here is what I did:

On my state return, under Part Year and Non Resident Income, i went to Wages and Allocation where it showed the numbers from my W2. I clicked on Continue and it asked for Part year Resident Income allocation which showed my income reported on the Federal return i.e. Interest, Dividend, IRA distribution etc. I entered the proportionate income (based on dates) under NC Resident Income column and clicked Continue.

On the NC form D-400 on line 13, it calculates a part year residents and nonresidents taxable percentage and then calculates tax based on that number. How is that amount calculated and why not the actual amount is used from my W2 and other gains and losses? In the subsequent sheet D-400 Sch PN it does show the actual W2 and gain/loss amounts though. Why this difference?

And the Part year resident income sheet has a column for Capital Gain (Loss)- should i enter both short and long term loss there after adding the two?

I remember it asked for rental income in one questionnaire and I had entered zero since I was making an unallowed loss, so i entered zero. IS that right?

Where do I enter the passive losses to carry over for the state return?

Thanks,

[ErnieS0]

North Carolina D-400 Schedule PN is used to compute the NC percentage of total income. That percentage is on line 24.

That percentage is transferred to line 13 of NC D-400.

North Carolina uses the percentage on line 13 to calculate the percentage of NC taxable income. This is how NC decided to compute income.

You to not have enter passive loss carryovers on your state return. NC starts with federal income every year. If you use passive loss carryovers on federal to offset passive income, that amount will be included in federal adjusted gross income and passed through to NC income.

The loss rules are the same for federal and state so there is no need for separate accounting.

[goyal_raj]

Thanks ErnieS0.

DO you mean that I do not need to separately add any passive losses for NC state? I do remember that that Turbo tax asked me that question and i do not have the info ready so i skipped it but now i can't go back to that question.

Any reason why NC state tax forms created by Turbo tax have no forms from the Federal return, unlike California state where all Federal forms are included?

Thanks,

[ErnieS0]

TurboTax will carry over passive losses from federal. I'm familiar with any questions on state about passive losses. If you have an overall rental loss, that is allocated between your two states on the North Carolina part-year form.

There are questions about a net operating losses.

North Carolina does not require you to send federal forms if you e-file.

[goyal_raj]

Thanks ErnieS0.

Does it also show accumulated losses from rental property from previous years? I can't see any passive loss info on the NC return at all.