I am going to answer this question, while making some assumption based upon what you wrote. I am assuming the LLC is related to a rental property or properties, which is filed on Schedule E. The first question is yes; you would enter the passive losses for this activity only after you checked the "I have passive activity losses carried over from last year" box.
So if this is an LLC that has rental properties, the passive activity losses are the disallowed losses. A quick Google search shows these as being used interchangeably. This is the general rule:
If you don't qualify for the real estate professional designation can claim losses of up to $25,000 on their rental properties. Losses are income-dependent and are disallowed if you report more than $150,000 in modified gross adjusted income.
The loss disallowance rule is a rule created by the IRS that prevents a consolidated group or business conglomerate from filing a single tax return on behalf of its subsidiaries in order to claim a tax deduction for losses on the value of the subsidiary's stock, though that does not appear to be what you are talking about.
You can also have passive activity losses on this sheet associated with an activity generally associated with a partnership. They would be entered in the K-1.
If there is a follow up to this please ask.
Thank you for the opportunity to answer your questions @mlemaire87
All the best,
Marc T.
TurboTax Live Tax Expert
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