Schedule k1 partnerships my personal turbotax deluxe will not carry a loss to my calculation

[TurtleAnna]

Your loss is likely limited by the at-risk or passive loss rules. 

If this is a publicly traded partnership, losses can only be offset by income from the same activity or when the activity is disposed of in a completely taxable transaction.

If you indicated you are not at-risk for losses in the activity, your loss may be limited by the at-risk rules (Form 6198).  This is a question in the partnership K-1 interview.

If this is not a publicly traded partnership and you indicated you are at-risk for losses, then you are likely limited by the regular passive loss rules.

If this is a trade or business partnership and you did not materially participate, the loss will be suspended and carried forward until you have income from the partnership or sell your interest in a fully-taxable transaction. 

If this is a rental partnership and you do not actively participate in the management of the rental property, no passive loss is allowed on the property unless you have other passive income in your return or you dispose of the property in a taxable transaction.  This unallowed passive loss will carryforward & be available next year.

If you do actively manage your rental property & your modified adjusted gross income is not over $100,000 ($50,000 if married filing separately), you would be able to claim the $25,000 active participation loss allowance for rental real estate activities.  This allowance phases out as your modified AGI approaches $150,000 ($75,000 if married filing separately). 

This loss allowance is not available if you are married filing separately & lived with your spouse during the year.  If you are married filing separately and did not live with your spouse during the year, your active participation loss allowance is limited to $12,500.  See Form 8582 in your tax return to see why you did not qualify to claim the loss.

There are some questions in the interview for your partnership K-1 that ask about participation in the program.  It sounds like you answered these correctly that you don't materially participate.  In this case, the loss will be suspended and carried forward to future tax years.

[Double-3Three]

Passive loss on K1,line 1 will not carry over to form 8582,why?

[Double-3Three]

Form 8582. Should Passive Loss on K1 flow to form 8582?

[Double-3Three]

Where will the  carry forward loss be documented?

[Double-3Three]

Then form 8582 is required to document losses?

[DaveF1006]

Yes, a passive loss from a K1 should flow to form 8582.

[DaveF1006]

Yes, form 8582 is required to document passive losses in excessive of passive income. It also is necessary to report unallowed passive losses from prior years. 

According to this IRS pub , Form 8582 is used by noncorporate taxpayers to figure the amount of any passive activity loss (PAL) for the current tax year and to report the application of prior year unallowed PALs. A PAL occurs when total losses (including prior year unallowed losses) from all your passive activities exceed the total income from all your passive activities. 

[47acre94]

@TurtleAnna  You seem to know what you're talking about on the various types of partnerships and at least know about these publicly traded partnerships. In TurboTax, as one is entering the information from the K-1 statement, there comes a point where it asks to "Describe the Partnership". There are a number of boxes below that you must check if they apply. For example, I have always checked the box #2 and #3, which state "I have passive activity losses carried over from the last year" and "all of my investment in this activity is at-risk". There is another box that I have not checked in the past, but I believe I should have and is my main question:

The box says "I have at-risk losses carrying over from 2018". If this box is selected, TurboTax will launch the "K-1 At Risk Limitation Worksheet". In this worksheet, there are 4 columns of information: 

1. Total current income or loss (i.e. for this year)

2. Carryover Prior year loss - this is the column they are asking you to complete

3. Allowed Income or Loss - calculated based on columns 1 and 2

4. Disallowed Income or Loss - calculated based on columns 1 and 2

Unlike most things that TurboTax will keep track of - like the passive losses - it seems they want you to manually enter these values in here even though you've already stated they are "at-risk"?

My questions based on the above are: 

1. Am I understanding this correctly? Do I check that box and then manually enter the At-Risk losses from a previous year? 

2. Presumably, the answer to question #1 is "yes", then must I go back to whenever I purchased these PTPs and redo my taxes for every year up until today?

3. What forms should I get from TurboTax as a record of these additional "At risk losses"?

4. Where/how does Form 6198 come into play?  

Thanks,

47acre94