Oregon Income Tax on Rental

3 Replies

Hey! I live in WA and we are looking at a 4-plex in Oregon. WA doesn't have state income taxes where OR does. Will anyone give me a run down of what they experience tax wise when living in a state with income tax and investing in one that does?  My wife and I both have w2 jobs in WA and own rentals in WA as well.  My biggest concern is OR might consider part of our income earned in WA.  We would purchase the 4 unit in our own names and finance as such. Thanks!

OR will 100% consider your rental income earned there as Oregon source income. 

Your rental income will be subject to federal income taxes, and also OR state tax. 

None of your other wages will be taxed by OR


@Spenser Harding

You will generally file an OR non-resident individual tax return.  OR will only tax your OR source income.  If you have positive OR net taxable income for the year you'll pay OR income taxes.

Normally you'd use those OR taxes paid as a tax credit on your home state return, but as WA doesn't have an individual income tax you don't have the possibility of being double taxed as far as state level income taxes are concerned.

@Spenser Harding

You got some good advice.

You will be required to file an Oregon non-resident tax return reporting the income earned in Oregon, Oregon rental income in this case.

You may not have a net income within the state thus resulting in no taxes paid to the state.

You want to be wary if the state has a threshold if you even have to file a return with the state.
You also want to be wary if the state allows you to carry forward any losses forward if you do have a loss from your rental.