Last October I moved from California to Connecticut, converting my primary residence to a rental. I didn't get it rented out until December, so I ended up with a loss for the year. My California income taxes ask for the portion of the loss for properties located in California, so obviously I attribute the full loss to my California taxes. Then my Connecticut income taxes ask me for the portion of the loss I attribute to when I was a resident of Connecticut, which is also all of it. So it seems that I can attribute the full loss to both states, although that doesn't seem right.
My understanding is that normally if you have a net rental gain, and you would pay taxes to both states but then get a credit such that it would balance out. Let's say I made a net of $10,000 on my rental property. California taxes me $1000. Connecticut wants to tax me $500. From what I've heard, I could get a credit from Connecticut for the taxes I paid to California which would negate the $500 and thus the double taxation. But in this case, since I have a loss, I would be getting a negative credit, thus increasing my taxes. But there's nothing forcing me to take that "credit", is there? So can I deduct the full rental loss on both states' income taxes?