Living in California investing out of state taxes

5 Replies

If you are buying your rent properties correctly, depreciation offsets the income so there is no taxable income anywhere.  Once you sell you may have to pay capital gains, but if you are growing your real estate portfolio, there are other ways to offset that income.

@Tommy Mckeown

It’s too broad a question as it may depend on type of investing you are doing and in which state you are investing in. Some states have reciprocal agreements and others do not… typically you don’t get double taxed but I strongly recommend having a cpa on board who knows what they are doing prior to investing

Originally posted by @Greg Scott :

If you are buying your rent properties correctly, depreciation offsets the income so there is no taxable income anywhere.  Once you sell you may have to pay capital gains, but if you are growing your real estate portfolio, there are other ways to offset that income.

 ^^^What he said, couldn't have said it better.....!

I would add that not only depreciation offsets the income, but also a wise strategy of write-offs and expensing......

@Tommy Mckeown

As a California resident, you will be required to file a Federal tax return and a California state tax return.

You will also be required to file a non-resident tax return where your rental property is located. The exception would be if the state does not have a state income tax or if your income is below the filing threshold.

Normally, your resident state will provide a credit for taxes paid to another state to avoid double state taxation.