State Income Taxability? Live in TX, rental in AR

[tconly]

What is the name of your state? Texas/Arkansas

I live and work in Texas (no state income tax) and am considering renting out property I
own in Arkansas (up to 7% state income tax). If I do this, what portion of my income
(regular working income vs. Arkansas property rental income) would I be required to pay
state income taxes on in Arkansas?

If it is both my regular income and my property rental income - I suppose it could be
better to just let the property sit idle. If it is just the rental income, then it seems like
a good idea.

Thoughts?

Thank you.What is the name of your state?

[seniorjudge]

Q: If I do this, what portion of my income (regular working income vs. Arkansas property rental income) would I be required to pay state income taxes on in Arkansas?

A: 100% of what you earned in Arkansas. That's my guess.

[abezon]

You'll pay tax on the Arkansas net rental income & when you eventually sell the rental house. Since rentals usually run at a paper loss after depreciation, you'll probably not pay any taxes in Arkansas until you sell.

[LdiJ]

Originally Posted by abezon

You'll pay tax on the Arkansas net rental income & when you eventually sell the rental house. Since rentals usually run at a paper loss after depreciation, you'll probably not pay any taxes in Arkansas until you sell.

Its really not fair to say that rentals usualy run at a paper loss. If there is a mortgage on the property and interest to deduct, yes, I would agree with that. However, if the property has no mortgage, or only a very small mortgage, then its not going to result in a paper loss, even taking depreciation into consideration.

[tconly]

Thanks for the inputs. I found details in the Arkansas state tax forms. Although I must show all income, there is a column for Arkansas Income only - and these rentals fall into that.

With regards to paper loss (I have two rentals), my experience has been that depreciation doesn't offset the passive income as much as the interest and darned maintenance expenses like replacing HVAC...

Thank you.