Maryland help?

[Possi]

I have clients who own rental property in MD and NC. They are HI residents.

As I read, they are required to file a MD return if they have any income from MD. They have gross income that nets to a loss.

I will file the MD return to be on the safe side unless I hear from someone who knows better. I tried to call them but it is too late today.

CA makes us file for rental income, no matter the net, so I would think MD is doing the same thing.

Thanks!

[Lion EA]

Your clients will be glad to have those MD losses when they sell the property.

[Abby Normal]

I never file a nonresident state with a loss. I figure they're not interested since they won't get any money.

[Possi]

3 minutes ago, Abby Normal said:

I never file a nonresident state with a loss. I figure they're not interested since they won't get any money.

CA demands a return whether it is a loss or not. I don't want any issues with CA!

 

[Lion EA]

The state will get lots of money when your client sells property in them.  And, your clients won't have any carryover losses to lower their tax burden.  I insist on state returns for real property.  I let clients make the call re all those states have tiny PTP income or losses.

[Abby Normal]

MD starts with federal AGI, so they don't track your carryover rental losses separately. But MD does withhold income tax on the full sales price when out of staters sell.

Or are you saying you could generate a state NOL and carry that forward separately for that state? I'd never considered that.

[Lion EA]

Haven't dealt with MD.  Have a couple CT clients with NY rentals.  We're carrying forward losses that will come in handy when they sell their NY properties.  Maybe, PA, too; a bit sleep-deprived to remember now.  Yeah, starting with AGI is a game-changer, though.  Shouldn't have answered without preparing MD returns or at least having time to look at one!  Sorry.

[Abby Normal]

MD may well allow a state level NOL carryforward on rental losses. I just had never considered that possibility on out of state rentals. Most of my out of states make money, though, or just break even.