Rental Property in Non-Resident State - State Tax Question?

Question

In 2005 I lived, worked, and owned a home in Georgia. Then moved to Michigan where I now live, work and own a home (i.e. primary residence in Michigan). Was not able to sell the Georgia home, so now renting that property at a net loss. Two questions: 1) For 2006 tax year (lived, worked, and owned home in Michigan the entire year) - do I need to file a Georgia State Income Tax form (in addition to the Michigan State income tax form)? I am not a real estate professional, so the rental property is passive income (loss). 2) Do I claim the net income (loss) of Georgia property on my Michigan State Income Tax?

Answer 1

Your state of residence is entitled to tax your world-wide income from all sources. The downside for the state is that they also have to allow any legitimate losses as well. If MI allows passive losses to offset other income then you can use the loss from the GA property subject to whatever passive activity losses MI has to offset other income.

At least one state that I know of from personal experience (OK) does not tax rental income from property located outside the state -- at least they didn't when I lived there about 10 years ago. If MI treats out-of-state rental income the same way, they would not allow the loss to offset other income either.

You probably do need to file a GA non-resident return since the total rent receipts for the property most likely exceed the GA maximum income for non-taxable status. The expenses against the receipts would lead to a loss that would leave you owing no GA income tax but you'd need to file a GA return to prove that.

Answer 2

2

Answer 3

In addition to what bostonian said, it might not be a bad idea to file a Georgia non-resident return, even if it calculates no tax due.

Why? It starts the statute of limitations and might solve you headaches down the road of Georgia ever got wind of rental activity and decided to assess taxes.

Answer 4

CALIFORNIA RESIDENT OWN A RENTAL PROPERTY IN MICHIGAN. REQUIRED TO FILE MICHIGAN TAX RETURN

Answer 5

Rent-To-Own Homes : http://RentToOwnHome.uzaev.com/?rtpU