Client owns an interest in a couple of LLCs taxed as partnerships. These LLCs own and operate commercial rental real estate located in NJ. These activities are passive to the client. The client is not a NJ resident and has no other NJ source income or loss.
Due to other passive activities, around a few grand of passive losses from these LLCs is released each year. Thus, the client has a little bit of NJ source loss each year.
Question: Do we need to do anything other than file a NJ nonresident return to establish the NOL with NJ? I am trying to help the client figure out the cost benefit of building up NJ source NOL for a potential exit event vs passing and avoiding a bump in compliance fees.