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    Dennis or Sandy

    I have a question involving California for you. I have a client who has never resided in CA but she did have interest in a limited parntership that operated in CA, I assume since she always got a CA K-1.

    She has had NOL for the past few years and usually small losses or a little interest from K-1. It never amounted to over a couple of hundred dollars from the K-1.

    The partnership sold or liquidated or something. It is finished as of 10/31/06. In the sale of the partnership she has ended up with $2674 of ordinary income, almost $1000 on Sch D and over $4400 of debt forgiveness.

    I did the CA return as non-resident and it comes up with her owing no tax. Her AGI was a negative $30476. As I said she is carrying NOL for several years forward. Since the NOL's have no basis in CA, I just wanted to make sure that this was correct that she didn't owe CA any tax.

    Dennis or Sandy, if you have any questions you can email me - lforner@earthlink.net.

    Thanks.

    Linda F

    #2
    Nol

    Linda,

    The 540NR will start with any CA source income below the section for personal exemption. That will be where the negative Federal AGI of -$30,000+ (line 13), if I understand your question correctly. So, you could be correct in owing nothing here.

    If you have no diagnostics, but feel something doesn't look right, fax pg. 1 & 2 of the 1040 and the 540NR & 540NR-CA to me (not all the worksheets) and I'll take a look for you and get back to you.

    I will email my fax #. If you have any further questions, post them or email me.

    Dennis

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      #3
      Linda...

      Everything carried where it needed to and the Fed and CA differences are fine and correct.

      Looks good. I would file it!

      Dennis

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        #4
        Thanks

        for your help, Dennis.

        I really appreciate it.

        Linda F

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          #5
          Everything was correct!

          You're very welcome, Linda. Glad I could help you out.

          Dennis

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            #6
            Glad Dennis could help

            Sorry Linda, I am on a huge partnership return that is giving me "grief", but Dennis gave you some good advice.

            So I will try on the next one!

            Sandy

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