Question
Non-Resident Returns and Passive Losses
Assume you have a taxpayer who has invested in a partnership that operates in a state that is not his home state. The partnership is reporting passive losses to the taxpayer. As such, the taxpayer is not required to file a non-resident income tax return as the taxpayer is below the required filing requirement. Meanwhile, the suspended passive losses keep adding up. Do you file the state return anyway in order to give the state a paper trail of suspended losses or do you wait until the time the suspended losses are needed to offset income reported by the partnership to file a required return and reveal them at that time?
