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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 2574
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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This question is who can understand North Carolinas,

Customer Question

This question is for someone who can understand North Carolinas, individual
tax income and forms to fill out.
My husband and I have a house in NC that we rent out. This year we had a negative
11,659. real estate loss. My husband also receives a small pension check from NC
this year it was 7372. we had 900.00 taken out for state taxes. after our taxes were finished we owed NC 3049. Do you know why we have to pay NC taxes on money
earned elsewhere. Thanking you in advance for you help.
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.
Hi,First lets deal with what they can and cannot tax. Thay CANNOT tax the pension, nor should you report it on a Norrh Carolina non-resident return. (Federal law states that pensions are taxed in the state of residence) And in the case of the rental income (which IS NC source income) ... NC is one of only two states that has you determine the ratio of your North Carolina source income to your federal adjusted gross income. In your case, that ratio will be your rental income/ your total federal income (so lets say X%). Then that ratio gets applied to your federal adjusted gross income. But it's X% of a negative number, so again there is nothing to base a North Carolina state tax on. You should have NO tax for NC. ... BUt depending on what package you use, there will be a process to go through to allocate the income ... it appears that you haven't gone through the allocation process and it's counting EVERYTHING as being allocated to NC In the event you use turbotax, see this: https://ttlc.intuit.com/questions/2290744-i-have-non-resident-rental-income-but-on-federal-return-comes-out-as-a-loss-how-do-i-enter-it-on-my-non-resident-state-form-for-nc-current-resident-ut
Customer: replied 1 year ago.

Well, thank you so very much. I thought I had lost

my mind. No I have no gone through the process

it is allocating everything to NC. Funny....turbo

tax did my taxes this year...I will check and thank you again so very much

Expert:  Lane replied 1 year ago.
Your positive rating (that's how we're credited for the work here) is thanks enough. Try to enjoy the day!

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