Needed to amend my 2020 return due to rental income passive loss carryover. Can I file 2021 now?

[sr2122]

Hello,

I forgot to carryover my passive rental income carry over in 2020. It was my first full year with the rental property and I had a minor loss in 2019 that i forgot to carry over into 2020. I discovered this when filling out my 2021 taxes. 

I used 2020 TurboTax to prepare my amended return. It slightly increased by refund as I would have been able to offset more of my 2020 income using my passive rental income carryforward from 2019. I just mailed my amended return today. 

Then I used the unallowed losses on the amended 2020 return (Worksheet 6, Column B) to fill out the passive income loss carry over for my 2021 taxes. It doesn't affect my 2021 taxable income as my entire loss for this year is unallowed due to income hitting more than 150k. 

Based on this, can I go ahead and file both my 2020 amended return and the 2021 return? Or do I need to wait for my 2020 return to be processed before I can submit 2021 return? 

[LeonardS · Accepted solution]

No, you may file both your 2020 amended and 2021 tax returns at the same time.  However, you should import your 2020 amended into your 2021 to ensure that the correct amount of unallowed loss is carried over to your 2021 return.  You will not use any of it for your 2021 return but you want the full amount of unallowed losses for future years.