I strongly advise against manually applying the losses against your nonpassive income by editing the forms directly. In doing so, you risk the possibility of the “Accuracy Guarantee” being voided.
Using TurboTax Home and Business following the steps below, the non-passive losses were applied against other non-passive income.
- Open TurboTax.
- Go to the Business Tab > Business income and Expenses
- Select “I’ll choose what I work on”
- Rental Properties and Royalties > Update
- Select “Yes” on the screen,” Income from Rentals or Royalty Property You Own”
- On the screen, “So far You’re not a Real Estate Professional,” put a check in the first two boxes.
- Continue
- The following screen should say, “Let’s Determine Your Real Estate Professional Deductions”
- Continue answering the questions.
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