Hawaii non resident personal income tax with NOL carryover

Hawaii nonresident taxpayer has a rental property in Hawaii that produces a
net operating loss to be carried forward. He has no prior Hawaii income to
do a NOL carryback. It is anticipated that taxpayer will have a Hawaii NOL
for the next several years. Does the taxpayer have to submit to the state
of Hawaii a tally of unused NOLs each year in order to keep track of them
for future use, or does he just do this on his own and present the data when
he begins to use the NOL to offset future Hawaii income?
Reply to
Pico Rico
Hawaii requires that anyone doing business in Hawaii (this includes renting property) must file a tax return even if there is no taxable income.
Reply to
Alan
yes, that is quite understood. Did you understand the question? "Does the taxpayer have to submit to the state of Hawaii a tally of unused NOLs each year in order to keep track of them for future use, or does he just do this on his own and present the data when he begins to use the NOL to offset future Hawaii income?"
In NOL year 2, does the taxpayer submit, in addition to the income tax return, a tally showing NOL year 1 + NOL year 2? etc.
Reply to
Pico Rico
Sorry, I assumed by telling you to file each year you would look at the instructions for Line 19 of the N-15 on how to carryforward an NOL.
Reply to
Alan
yes, of course I had read the instructions. But I STILL have my question, as I want to be sure this is done right.
Does the taxpayer need to submit, each year in addition to the income tax return, a tally of unused NOLs each year in order to keep track of them FOR FUTURE USE, or does he just do this on his own and present the data when he begins to use the NOL to offset future Hawaii income?
For any others reading this thread, the instructions state "If you had a loss in a prior year to carry forward to 2013; enter it on line 19 and shade the minus (-) in the box to the left of the amount boxes. Attach a separate sheet showing how you figured the amount."
Is a loss in year 1, which is to be used for the first time to offset income in year 7, a loss "to carry forward" to intervening years 2-6? Or is a loss "to carry forward" to year 7 only?
Reply to
Pico Rico
You stated that a nonresident of Hawaii without any other Hawaiian source income has rental property with an NOL and it was anticipated that he would have an NOL for the next several years. I took that to mean that the rental property was generating income every year or was available for rent every year and that expenses exceeded income in each year. As such, he would file the N15 and account for his net loss each year including the carryforward. Each year, the carryforward would grow and be reflected on Line 19 of the N15. Hawaii wants to see how the carryforward on Line 19 was calculated. They tell you to use the N109 Schedule A as a worksheet or attach your own worksheet. As there are other items (see the Schedule A) on the N15 other than the rental loss that affects the amount of the NOL and those items can change each year, Hawaii wants the worksheet each year.
Reply to
Alan
ok, that does it for me. Thanks. Pretty odd that Hawaii tells taxpayer he cannot file a form but they should use its schedule A (and presumably file it, although they don't make it clear when). And, since line 7 of schedule A adds in prior years' NOLs, I guess that is where the tallying occurs, and each year.
There is no instruction for line 7. I believe this should be a negative number showing the accumulated unused NOLs for prior years, correct?
Reply to
Pico Rico
First you need to remember that you are using the Schedule A as a worksheet to show Hawaii how the number you put on the 2013 Line 19 was calculated. Line 19 is the amount of unused NOL from the prior year. The amount of unused NOL would have been calculated on the prior year's return. So, the worksheet is sourced from the prior year data and should be so noted or use the prior year schedule A. Line 1 and 3 on the worksheet (the Schedule A) is from 2012. Line 7 and 9 are from 2011. Line 10 of the worksheet is the unused NOL from 2012 that you are placing on Line 19 of the 2013 N15. The 2013 worksheet would be used to support the carryforward to 2014.
And.... Yes, the amount on Line 7 is a negative number. Otherwise you don't arrive at the right answer.
Reply to
Alan
This answer was given in 2014, but I have the same question now for 2019 taxes and there are no line numbers in schedule A. Turbo tax doesn't give me the option to put anything in sch A. How do I enter the suspended passive loss for the condo I sold last year?? Thx
Reply to
kaymadnani
I also have rental property passive losses for rentals in Hawaii. However, the amounts of the losses are different amounts from Federal as we have income in our home state of Ca. Since there is no income in HI, besides the negative rental amounts every year, we add this to the suspended passive losses which keeps growing each year whereas in Federal some of it gets used up each year.
We sold one of the rentals in 2019 and I was trying to figure out how to make HI use the gain on the sale against the passive loss amount for that property.
I saw your message about using property profile to put in the passive loss amounts. However, as soon as I did that it messed up my federal return because as I said above, the amounts are different in Federal and HI.
How do I put in the HI suspended passive loss amounts and not have to pay capital gains tax on my sale as it should be covered...??? Also, schedule A doesn't have line numbers to put in the history of passive losses...
Reply to
kaymadnani
It's been years since I did an Hawaii N-15 nonresident return with postponed PALs. Assuming that you have been reporting your postponed PALS via a negative entry on Line 19 of the N-15 each year, HI should have a record. You could have used the federal 8582 marked up with the word Hawaii at the top to show the amount that you posted to the N-15. Hawaii allows the use of the federal 8582.
That said, If I were you I would prepare a what-if set of federal forms that reflected your HI sale and use of the postponed PALs to reduce your gain as if your federal returns had always matched the HI set of numbers. This would require you complete a 4797 and an 8582. Then, I would just substitute the HI forms for those what-if federal forms. Replace the what-if 4797 with HI Sched. D-1 and take the 8582 and write the word HAWAII at the top. Complete the N-15 and its schedules plus the D-1 and the HI 8582. If there is any postponed PAL left over, place it on the N-15 Line 19 as a negative number identified as PAL. Then prepare your federal 4797 and 8582 consistent with what you have been reporting to the feds.
Reply to
Alan
Unfortunately we have not been putting the PALs on line 19 as we were not aware of it. However, HI has been creating 8582's where each condo is listed separately. Two issues with this - the numbers in Federal are different as we have retirement income in CA and Fed and CA have been whittling away at the PALs each year. However, in HI, we only have the rental negative incomes, and even tho' on the 8582 it says we can deduct x amount, there is no way to deduct x from 0, so we've been keeping our own spreadsheet records adding the current year's losses to the PAL's. The Hi 8582 doesn't even do it correctly year to year. In doing the 2019 taxes, the right gain amount is input into Fed , but somehow on the N-15, after HI makes adjustments etc. the Supplemental line shows a different number for Fed - we went ahead and put the same number into the HI column. It didn't recognize the PAL for that condo from the 8582 and since we didn't have it on line 19, it calculated the tax due. The second issue is the HARPTA - there is no way in TT to input the amount on line 55 (288A), unless you override the box. So, yesterday, we went to the Fed input and under other taxes entered HI and the amount. It showed up in line 54 of the N-15 and said attach W-2's which we don't have... So disappointed with the way Turbo tax Premier is handling the HI return. If you have any other suggestions, I would appreciate them Thanks so much...
Reply to
kaymadnani
> Hawaii nonresident taxpayer has a rental property in Hawaii that produces a > net operating loss to be carried forward. He has no prior Hawaii income to > do a NOL carryback. It is anticipated that taxpayer will have a Hawaii NOL > for the next several years. Does the taxpayer have to submit to the state > of Hawaii a tally of unused NOLs each year in order to keep track of them > for future use, or does he just do this on his own and present the data when > he begins to use the NOL to offset future Hawaii income? > > > Thank you!!! Will file a paper return as suggested > --- > This email is free from viruses and malware because avast! Antivirus protection is active. >
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Reply to
kaymadnani

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