My wife and I bought a condo in 2021 and got a very small amount of rent in 2021, which we did as a sole proprietorship on our 2021 taxes, via TurboTax Home and Business. I think it was a Schedule E.
Starting Jan 1, 2022, we created a partnership LLC and I recently filled out a Form 1065 (along with the form 8825, form 4562, and two K-1's) and sent all the forms in to the IRS last Wednesday (March 15, 2022... the deadline). We had a loss, which I split 50/50 on the K-1's. Now TurboTax Home and Business (I have another sole proprietorship) thinks I still have the sole proprietorship rental business from last year and says I have $3,100 of carryover loss, which it seems to think is a passive loss... it's not, it's an at-risk loss... we were always involved in the management and decision making of the rental, even though we had an agent in Florida to do some of the management for us.
In 2022 there were 6 months when we couldn't find a tenant, so we ended up with a $15,200 loss.
Question 1: Where do I enter the K-1 losses on the Home and Business desktop software?
Question 2: How do I let the TurboTax software know that I changed the business from a sole-proprietorship to a partnership?
Question 3: Can I still utilize that $3,100 carryover loss from 2021 and if so, how do I do that, or do I simply lose that by changing from the Schedule E to two K-1's?
Thanks.
