What number should I put as Passive Operating Loss in Schedule E Worksheet?

[ming3]

My rental house has a loss, rather than profit. After I filled up the return online, the Review section said that the Passive Operating Loss in Schedule E Worksheet is missing. What number should I put there? I have used TurboTax online for many years and also had rental loss several years, but have never been asked for that before. I tried to put in last year's carryover number (from last year's Form 8582, Part VII column c) or the number of current year's loss, but it did not help - The Review still asks me to check the same issue. Is this a bug in the program? Does someone know what I should do? Thanks!

[PatriciaV]

This experience has been reported to our development team for further investigation. In the meantime, you may be able to use this work around solution:

When you run Smart Check, TurboTax will present a section of Schedule E Worksheet Carryovers to 2024 Smart Worksheet, Disallowed Passive Losses by Year and Type. You'll see the carryovers are out of sequence. In some cases, 2022 is on the 2021 line. Or the 2023 number is on the 2022 line. 

To fix this, enter the correct number starting with the most recent year. Then move up the schedule until all years are correct. This may be easier if you can access your 2023 return and print the Schedule E worksheet.

If instead you see several types of carryovers under Passive Loss Carryovers, scroll down until you find the continuation schedule and can see the amount that should have carried over to 2023, then enter that amount for Line G Regular Tax of the summary schedule.

If you're unable to scroll down in the popup window to see these lines, you will need to transfer your return to TurboTax for Desktop so you can use Forms Mode to fix this carryover. See How do I switch from TurboTax Online to the TurboTax software? Also, contact TurboTax Support and request a free download due to the online program restrictions.

[ming3]

@PatriciaV

Thank you very much for your help!

Can you let me know how to run Smart Check you mentioned? When I start the Review section online, it simply tells me this is an issue, then brought up the screen (see the attached picture) where the only changeable field is the Passive Operating Loss box at the top. Even though when scrolling down, I do see some wrong numbers were assigned to different years, there is no way to correct them.

You also mentioned that I may need to use TurboTax for Desktop to fix the carryover with Forms Mode. I hope I don’t need to go that far. But in case there is no other choice, after downloading, do I need to re-enter everything which has already been completed with the online version? Finally, if I made all corrections in TurboTax Desktop, how can it get sync’d with TurboTax online, so next year when I use the online version, I don’t see those errors again?

Thanks again for your advice!

[DawnC]

If you download the desktop software, you will be able to access your 2024 TurboTax Online tax return.   You will save that tax file (after all errors are gone) and when you start next year's return in TurboTax Online, you will transfer in that 2024 tax file you saved from desktop.   So, you will be able to go back to TurboTax Online next year.  

You go through Complete Check from the File menu or the Federal Review menu, but it seems this error is preventing the Complete Check in TurboTax Online.   If you are not able to correct the errors in the Rental section, you will need desktop to access Forms Mode.  

[ming3]

@DawnC 

Thank you for the reply!

I don't see the Complete Check under Federal Review menu. As you said, the error is preventing the Complete Check in TurboTax online.

Because of my MAGI, I wouldn't be able to deduct my rental loss in 2024 anyway. Thus, I think I will just keep a note, hoping this error will be fixed by TurboTax next year. Then I can see and correct these numbers next year online. As for 2024 return, since the wrong numbers are only on Worksheet and I wouldn't be able to deduct the loss anyway, I guess it wouldn't hurt anything. Am I right?

Thank you for your advise!

[ming3]

@Patricia 

On the Schedule E Worksheet Carryovers to 2024 Smart Worksheet you mentioned, what number should I enter for each individual year? Should that be the profit or loss of that particular year? Or should it be the profit/loss from the particular year + the Carryover from previous year?

For example, if I have a Loss Carryover of $1,000 from year 2021 to year 2022, and I also lose $1,500 in year 2022, then on this Smart Worksheet, for year 2022 (like on the Smart Work sheet in your message, Year 2022, Line P), should I enter $1,500 as the Operating Loss? Or, should I enter $2,500 (i.e. $1,500 plus another $1,000 from the Carryover)?

Thank you for your advice!

[PatriciaV]

If you have the carryover amounts from your prior year return, revise the table using those exact numbers (no math required). In general, you're moving the numbers down one year. Be sure you enter negatives with a minus sign.

[ming3]

@PatriciaV 

OK, so for each individual year on the table, I will just put the exact number that is carried over from prior year, correct?

In my example, there is $1000 carried over from year 2021 to year 2022, and in year 2022 I lose $1500 again. Assuming there is no deduction due to my MAGI, then for 2022 Operating Loss on the table, I simply put -$1000 that is carried over from 2021; and for Operating Loss of year 2023 on the table, I should put -$2500, which is the number carried over from year 2022 to year 2023. Am I right?

Thanks!

Thanks!

[PatriciaV]

Yes. Since you have the schedule from last year, enter the amounts by year from that table.