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Max W

North Carolina issue for non-resident

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CA client owns a rental house in N.C.   The rental has a net loss of $10,000.  The previous preparer had the client file a NC return.

Is it necessary for a non-resident to do so if no income is derived from NC?   From the NC instructions, I would think not.

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Yes, if there were any rents collected and if gross income from all sources everywhere exceeds NC's filing threshold for the client's filing status.  This is the actual quote from NC's instructions for nonresidents, and keep in mind that where it says "income" from rental, that means gross rental income before expenses:



If you are a nonresident, you must file if:

You received income for the taxable year from North Carolina sources that was (1) attributable to the ownership of any interest in real or tangible personal property in North Carolina or (2) derived from a business, trade, profession, or occupation carried on in North Carolina, or (3) derived from gambling activities in North Carolina and whose total gross income from all sources both inside and outside of North Carolina for the taxable year exceeds the amount shown in the Filing Requirements for Tax Year 2019 Chart for the individual's filing status.


Here's the filing requirement chart for 2019 for individuals:


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On 8/31/2020 at 11:27 PM, Lion EA said:

He'll be glad to have those NC losses when he sells the NC rental house.

I agree with this too ^^. 

Quoted Lion EA b/c a merge of two duplicate topics didn't work properly.  Creating a new topic with all three posts was the only way I could find to fix. Grrr!

Edited by jklcpa
Merge of topics didn't work properly.

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