No change to refund after amendment

Forum|Forum|7 years ago
June 1, 2019
1 reply
11 views

I received a federal and state refunds from 2016. Recently, I used TurboTax to amend my 2016 taxes. The amendment included adding $10,000 in losses from a rental property. I expected this addition would lower my taxable income by $10,000 and result in an additional refund for my state and federal taxes. However, turbo tax shows $0 as the refund. Does this mean TurboTax estimates I will not get any additional refund from the state and federal governments?

TurboTax Deluxe Online

JulieCo

Level 11

It depends. Rental properties are deemed to be a passive type of income activity; therefore, losses are limited as to what can be included on one’s tax return each year. If you actively participate in a rental real estate activity, you can deduct up to $25,000 of your rental loss even though it’s passive, but this exception phases out as your income rises.

Therefore, if your tax due or refund amount did not change after the rental losses changes were reported, it is more than likely due to the losses being excluded from your taxable income for 2016.