Question for MI and CA Experts

[Gary]

I have a client, full time AZ resident that has a rental house in California and in Michigan. Bith rentals show a loss on Schedule E. Does he have to file a MI and CA return?

Thanks for your help.

Gary

[MAMalody]

If I remember correctly, he would need to file a CA return, however, he cannot carry the loss forward. Disposition is where it could get fun.

[veritas]

You would need to look at each states'

gross income requirement. Secondly you may have net operating losses or passive loss carry forwards.

[dsi]

CA would definitely like to see a return.

[Gary]

Thanks

Thanks for your replies. I called the CA Franchise Board and the Michigan authorities and both said that if the net rental income was negative, they did not need to file a return.

Gary

[S T]

Maybe

I think if the rental is in Calif, they would want to file anyway.

Reason, when they sell the Calif property, Calif is going to automatically withhold a percentage of the net proceeds, and the t/p will have to file a return that year and will be taxed on disposition. So seems like you would want the passive losses if any.

Sandy