TT is handling this correctly.
- Passive losses are only allowed to the extent that you have passive income.
- Unless you have passive income, then your passive losses will be suspended and carried forward indefinitely.
- With respect to your distributions, you need to make sure you maintain a tax basis schedule. You will need this when you dispose of this investment.
- Additionally, if distributions exceed your tax basis, then you will have to recognize capital gain to the extent of any "negative" tax basis; essentially getting you back to zero.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
