As part of the final settlement of my mother's estate, I received an MI-1041 Sch K-1 showing a long-term capital LOSS on the last piece of property she owned.
Since I have absolutely no Michigan based income, do I still have to file a Michigan Non-Resident return ?
You do have MI-based "income" - the loss on the sale of real property located in MI. Whether MI will care if you don't file a return documenting the loss, I can't answer as I've never prepared a MI return. The instructions should ex[lain whether a return is required.
Ira Smilovitz, EA Leonia, NJ
FWIW, this is response from MI Tax Advocate re "Loss but no income" as non-resident. Reading their 1040 NR instructions shed no light on the issue.
There will be no carryover.
"Good morning,
Non-residents of Michigan only need to file a Michigan Individual Income Tax Return if your Michigan income exceeds your prorated exemption allowance, or if there was tax withheld or estimates paid, and you want to request a refund of all or part of those payments.
Since you have no other Michigan source income, you do not need to file a return to report the loss to Michigan. However, if you will have future Michigan source income that may be impacted by any available carryforward of the loss, you may want to file an informational return so that the loss is properly reported.
If you have additional questions or concerns, please let us know.
Renee
Taxpayer Advocate Section
Office of Advocacy Services
Michigan Department of Treasury"
snipped-for-privacy@michigan.gov <mailto: snipped-for-privacy@michigan.gov
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