A passive loss carryover will be entered in the rental activity using the steps below.
Passive Activity Loss Entry:
Assuming your passive losses were carried over each year, this will be a separate and identifiable entry which will carry to the Schedule E. The full remainder of passive loss carryover is used in the year of sale as an expense. This is combined with your overall rental gain or loss to your Form 1040.
- TurboTax Online: When you are on the screen 'Do any of these situations apply to this property?' (Property Profile section), be sure to check the box under Carryovers.
- TurboTax Desktop: Same screen check the box 'I have passive activity real estate losses carried over from a prior year.'
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