Schedule E, limit nonpassive loss by basis

Hi,

I have a K-1 for an LLC, which is a non-passive activity, where the investment is at-risk, but loses are expected to be limited by the basis.

I am attempting to get the correct values on Schedule E. The situation is that I have non-passive carry overs for ordinary loss, section 179 expenses, unreimbursed expenses, and nondeductible expenses. The allowed mounts for these in columns I and J of Part II of Schedule E, should be limited by the basis and I should have some carry over amounts to next year. Instead Turbo Tax is not limiting these values at all. How do I get Turbo Tax to limit the allowed loses.

In the past I have used a business tax professional (and had them complete this years as well so I know what the end result should be), but I would like to get the same from Turbo Tax so I know I can use it next year.

Instead Turbo Tax does not appear to be limiting the losses based on the basis.

687

Expert Alumni

Apr 11, 2021 1:51:22 PM

To report at-risk loss carryovers in TurboTax Online Self-Employed, follow these steps.

Click on Federal down the left hand side of the screen.
Click on Income & Expenses across the top of the screen.
Under Your income and expenses you will find Self-employment income and expenses.
Click on Edit/Add to the right.
Edit the self-employment activity.
Scroll down to Carryovers, limitations, at risk. Click Edit to the right.

The at-risk rules prevent taxpayers from deducting more than their actual stake in a business. See also this TurboTax Help.

Level 2

Apr 12, 2021 10:57:00 AM

@JamesG1 Thanks for the response. I'm looking to apply a basis limitation, not an at-risk limitation.

Also, I'm using Turbo Tax Premier desktop, but I'm assuming if support can be found in the online product it is likely to exist in the desktop one as well.

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Schedule E, limit nonpassive loss by basis