Filing individual K1s in the states

[Sam Dal]

Guys

This is sort of a continued post from the thread below

https://www.biggerpockets.com/...

I have a few k1's with syndicate and ATM funds which have invested in many states (12 for me). I spoke to my local CPA and he said technically, I should file my passive carry-over losses in every state. However, it's going to be $70 for each state and adding that up for 5 years it's quite a bit of money.

He also said practically and based on his 15 year history as a CPA, he's not seen states come after the 200 or so investors for a single property sale as it's not easy for them to enforce this. Is that accurate? If they come after you, he said most states will agree to take and reconcile the passive carry-over losses even though I didn't file them when needed. Over 5 years, it's going to cost me roughly $4000 in additional tax filing fees.

Thanks

[Ashish Acharya]

Originally posted by @Sam Dal:

Guys

This is sort of a continued post from the thread below

https://www.biggerpockets.com/...

I have a few k1's with syndicate and ATM funds which have invested in many states (12 for me). I spoke to my local CPA and he said technically, I should file my passive carry-over losses in every state. However, it's going to be $70 for each state and adding that up for 5 years it's quite a bit of money.

He also said practically and based on his 15 year history as a CPA, he's not seen states come after the 200 or so investors for a single property sale as it's not easy for them to enforce this. Is that accurate? If they come after you, he said most states will agree to take and reconcile the passive carry-over losses even though I didn't file them when needed. Over 5 years, it's going to cost me roughly $4000 in additional tax filing fees.

Thanks

 Cost benefit and risk analysis need to be done. Some states are notorious than others and have penalties. 

If your losses are not material and eventual tax saving wouldn’t be affected much even if states disallowed your losses, then don’t file.