Tax Answers

March 19, 1994

Here are answers from members of the Maryland Association of Certified Public Accountants to readers' tax questions. The Sun will publish answers through April 15.

Q: I have a rental property in Hawaii on which I show a loss. I am not a resident of Maryland but file a Maryland nonresident income tax return. I know I can deduct all my losses for my property in Hawaii on my federal tax return but can I also deduct it on my Maryland return?

A: A Hawaii loss is not deductible against Maryland income. However, the amount you lost on the Hawaii rental property will affect the calculation of your Maryland adjusted gross income (AGI). Form 505, Maryland Nonresident Return, walks you through the calculation that will give you your actual Maryland AGI considering the Hawaii loss and any other income or losses.

Q: My daughter is 14 years old and made $120 over the summer. Do we have to report that as income on our 1040 form?

A: No, this income need not be reported. A child's income needs to be reported only if:

* the child has at least $1 of unearned income (interest, dividends, capital gains) and more than $600 in total income, or

* the child has only earned income, and that income totals more than $3,700.

Note, however, if taxes are withheld from wages, a return must be filed in order to obtain a refund.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary. Consult with a tax adviser for specific advice.

Readers may submit questions by phone, mail or fax. Selected questions will be answered in The Sun and The Evening Sun.

To ask a tax question by phone, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll County 848-0338. Using a touch-tone phone, enter 6120 after the greeting.

Written queries may be sent to TAX QUESTIONS, The Baltimor Sun, Business News Department, 501 N. Calvert St., Baltimore 21278. Fax questions to the Business News Department at (410) 783-2517.

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