Can I carry forward the Passive Activity Loss instead of allow it? i.e. line 26 of Schedule E should be 0 instead of -21,600.

[alc8486]

I want to carry forward the Passive Activity Loss until I sell this rental apartment. I've been carrying this forward over since 2013, never had problems w/ this until now, but my 2016 return was done by an accountant, and I don't know how TT is getting the numbers from 2016. I already entered the PAL in TT for 2016 through their question wizard, but this did not change anything, only the actual number that was allowed.

[Rick19744]

You don't have the ability to pick and choose which tax year you report either income or loss.  These items are to be reported in the appropriate year based on your method of accounting, which as an individual, is more than likely cash basis.
If you don't take the loss in the appropriate year, you have the potential of losing that loss if the return is not amended within the proper period of time.

[alc8486]

I'm not sure which loss you're referring to, but I'm asking about this: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3154541-i-have-carry-over-losses-on-my-rental-property-will-they-e...>

I've carried forward the PAL from a rental property since 2012, and according to the article (and my accountant), I'm allowed to do so until I 'dispose' of the property. But this year TT has allowed it, and I want to change it so that it's disallowed as in my prior year returns

[Carl]

Passive losses are taken against passive income, and only passive income. Once those losses have reduced your taxable passive income to zero, that's it. Remaining losses are carried forward to the next year. As you're aware, it's not at all uncommon for passive losses on rental property to continue to grow and accumulate year to year.
I would fully expect that on the 2018 return you complete next year, line 26 will be even larger. (I would "know" there was a mistake somewhere if it was not the same or larger.)

[MichaelL1 · Accepted solution]

Rick19744 superuser comment above is correct, you cannot pick and chose when to take the PAL.

Your income must have gone down in the current tax year/ or you started materially participating in the rental activity. 

 "When your income is below $100,000 (MFS) ($150,000 for MFJ), you can take up to $25,000 of passive losses."  

Source:  https://www.therealestatecpa.com/2017/02/19/strategies-suspended-passive-losses-rental-real-estate/

Phaseout rule.

The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that’s more than $100,000 ($50,000 if you’re married filing separately). If your modified adjusted gross income is $150,000 or more ($75,000 or more if you’re married filing separately), you generally can’t use the special allowance. This is because the special allowance is reduced to $0 since the modified adjusted gross income is over the $100,000 amount.

Source: https://www.irs.gov/publications/p925#en_US_2017_publink1000104575