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Does IL have passive loss carryovers for NR returns?

DanaCPA
Level 1
 
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2 Comments 2
PhoebeRoberts
Level 11
Level 11

IL is one of the states that both permits passive loss carryforwards (unlike Pennsylvania) and doesn't require a loss-year return to report the carryover to them (unlike California). See discussion here: https://www.taxprotalk.com/forums/viewtopic.php?f=8&t=16043

 

TaxGirl3
Level 4

Very  helpful, thank you.  It's my understanding that IL passive losses are allowed for IL when allowed for Federal purposes and do not carry forward independently (unlike CA).  

My (VA) client has passive income from NC and passive losses from IL, and for federal purposes, some IL loss is allowed to offset NC income.  IL should therefore show the IL loss allowed, but Lacerte instead disallows it and reports the full loss as an IL passive loss carryforward (on the General Info statement, IL passive loss carryforward exceeds federal loss carryforward).

Assuming I'm correct, do I need to override IL Sch NR to show the allowed loss and make a note for next year to reduce the IL passive loss carryforward to match federal?

 

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