Rental Income From California

[geekgirldany]

I have a new client whose wife passed away last year. She had always prepared the tax returns. Client gets a Sch K-1 from family trust to report rental income from California.

Wife never reported this income on a California non resident tax return since 97.

I feel that I am required, of course, to fill out the California return because they did make over the required amount to report it.

My question, for any posters in CA, will reporting the income for 2013 bring up the prior years not being reported? I want to forewarn my client if so.

[geekgirldany]

I just want to bump this again to see if anyone could possibly help.

Thank you
D

[taxea]

I would advise your client that a CA return is required and warn that they may send a letter questioning the lack of prior returns....or they may just think that this is the first return that was required to be filed if no CA return is in their system. Remember that all this stuff is on computer and if their computer is not programmed to search for prior returns on this issue CA won't know the difference.
The other thing that could be done is to determine CA's statute of limitations and file returns that far back if the rental goes that far back. Up to your client.

[geekgirldany]

Thank you so much for posting. That helps a great deal. I will relay the info to my client. I talked to him today and he thought that the CA returns were being filed. The copies I have do not show any.

[FEDUKE404]

Non-resident CA return is likely needed

I just want to bump this again to see if anyone could possibly help.

Thank you
D

Well, we're kinda busy this time of year and a "quick response" may not be possible from most of us. . .

As for the CA issue: I prepared a client return earlier this month who had a K-1 from a CA enterprise (some kind of quasi-defunct rental arrangement?). Attached to the copies he provided me was a set of "California state documents" with the relevant PTS info/amounts shown.

My guess is CA taxes are possible, and the need for a CA non-resident return is virtually a necessity. (We don't have any numbers here. .)

As for whatever CA might do about the "old" years, that would be up to those wacky folks in Sacramento.

FE

[geekgirldany]

Well, we're kinda busy this time of year and a "quick response" may not be possible from most of us. . .
FE

Oh, yes I know everyone is very busy. I am going to meet with the client tomorrow and I noticed the post had gone to the second page as the forum is very active now. So I thought I would just give it a little bump.

I appreciate the information thank you.

[joanmcq]

SOL is 20 years in CA, and CA is very good at data mining for unfiled returns. However, look to the filing requirements for a nonresident..it's gross income, but the bogey is actually quite high (CA income of $15702 for single or CA AGI of over $12682 for single) so you might not have had a filing requirement.

[geekgirldany]

Thanks for that info Joan. Seems like I had heard in the past that CA is good at tracking things down like this.

I found the NR pdf on their website showing the gross income test:

https://www.ftb.ca.gov/forms/2013/13_540nrbk.pdf

They just went over the amount, both were over 65, because she was still working plus some total distributions on IRAs were taken. So their income was actually a little high compared to my other clients in the same age bracket.

I will forewarn him of what may come up.