How do I take deduction for a passive loss in a partnership in which I have sold my interest?

[Phillip1 · Accepted solution]

In the K-1 entry screens, you will need to do the following:

1. Continue through to the screen labeled “Describe the Partnership”

2. Click the check boxes “this partnership ended in 2016” and “disposed of my interest in partnership during 2016”.

3. Answer the question on the screen labeled “Describe Partnership Disposal”

4. Enter the disposition data and continue through the rest of the screens.

5. Continue through the K-1 screens until you reach the screen labeled “Describe the Partnership”

6. If not checked, check the box labeled “I have passive activity losses carried over from last year” and hit continue.

7. Either enter or check the loss carryover amounts until you reach the end of the K-1 section.

This should trigger the prior year passive losses to be deducted on your return.

[mwkuchnicki]

HI, I'm trying to follow the instructions above for an MLP and I don't see Turbo Tax applying the passive losses (about $5K) anywhere.  Where would I see it?  Would  there an offset to it?

[matthew-seltzer]

I'm having the same problem. I can't see anywhere that Turbotax has "released" the prior year passive activity losses. What are we doing wrong? Thanks.