1. Yes. All the losses are on your K-1. You simply need to enter the k-1 form and the program will generate the Sch E needed.
2. It first goes against long term gain, then short term gain. If there is still a loss, you can claim up to $3,000 against your regular income. The remainder will be a carryover for future years. See How to carryover a business loss from K-1.
Hi Amy -
Unfortunately this LLC did not provide a form K1, but just a statement of loss with supporting documents in a word file and details on my investment. Is this sufficient for me to fill in a schedule E, and if so, how do I fill in the schedule E for a limited partner (myself) that invested in this real estate fund without going through the K-1 form process?
Also, if one is filing MFJ, does the amount one can claim go up higher than $3000 against regular income in a given year? Is there any way to be able to claim MORE than 3k a year from a loss in an LLC investment as a limited partner against w-2 income? I do see in Schedule E part II there are boxes that say "passive income and loss" and "nonpassive income and loss". Wondering how I can claim the entire amount ~20k into the non passive bucket.
Thanks much!!
I have a similar problem. I entered a non-passive deduction on the K-1 form, but the deduction did not populate on Schedule E and was not subtracted from my taxable income.
Can you please give some more information? What box was this deduction listed in on your K1 and are you certain it was non-passive? And the schedule E usually nets out the income from the K-1. Are you certain it wasn't already deducted?
The deduction was listed in box 13, code ZZ. I have in writing from the partnership issuing the K-1 that it is considered a non-passive deduction and that should be deducted from my federal income on my individual tax return. I have looked carefully at the 1040 form, and the amount was not deducted anywhere. It seems as if it should be deducted on Schedule E, but I can't enter it manually there. Any thoughts?
Code ZZ doesn't get carried anywhere, That's informational.
If you are sure that this is a legitimate deduction then I would deduct it directly on the K1. the IRS has received a copy of the K1 and should be aware of the deduction. So deduct it from the amount that you are entering as the box 1 income and it will net out to the correct amount. Be sure that this is a legitimate deduction and save copies of everything that justifies the new entry.
Hi @RobertB4444 It appears that what used to be box 13, code W is now code ZZ for 2023 taxes. In the past, when I chose code W and entered an amount, on the next page of the EasyStep, I would get an option to select "Nonpassive deductions to be reported on Schedule E, page 2". However, in 2023 Turbotax desktop version, when I select code ZZ, I do not have that prompt. As a result, Schedule E, page 2 has blank for the amount I need to deduct and I cannot enter it directly on Schedule E either.
Turbotax needs to fix this missing prompt in 2023 desktop version ASAP.
Do I have any other options? Your suggestions are most welcome. Thank you!
In TurboTax for Desktop, go to Forms Mode and open "K1P Addl Info" under the related K-1 Partner form. Scroll down to Line 13 Code WW to ZZ, line 6. Enter a custom description on the yellow line and the amount in the yellow box. Your entries here will appear on Schedule E page 2.
I entered the amount onto the K-1 Addl Info form Line 13 Code WW to ZZ, but it did not carry over into Schedule E p2. I did not see a yellow box.