K-1 Income Negative, what to report to the state ?

Question

I am a California resident with a rental property in Kentucky.

My K-1 total from the property is negative, so I transfer that to my Kentucky non-resident state return. Which results in no tax due. This is my first time filing with a property, so I'd just thought I'd asked if that sounded correct. Thanks for your opinions.

Ashish Acharya · Answer

That’s correct.

Also did you check if they filed a composite return on your behalf. If they did, you don’t have any obligation to file.

If they didn’t file composite return, Kentucky requires non resident withholding as well. Your K-1 should show that if any tax was withheld at partnership level.

If net income at partnership level is negative, there probably is no withholding, but there can still be composite return.

Kent Estep · Answer

Thank you. I did have income in the state---rental proceeds---but due to a fire, it tuned into a loss for the year.

Basit Siddiqi · Answer

@Kent EstepYou should determine if you have a filing requirement in KY. Some states may not require a filing requirement depending on the states rules. They may have a filing threshold.You may want to file even if there is no filing threshold if the state has a NOL provision.No state income tax sounds about right if there is no income. You should determine if there is a minimum tax. otherwise no tax sounds about right. The question is if you filled the other parts of the return correctly(NOL carryforward(if any)).

K-1 Income Negative, what to report to the state ?

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