A vacation rental property was sold in 2020 and the gain was enough to release all suspended passive losses. I'm transitioning to TT Home & Business this year from an accountant. 1040 filings prior to 2020 did not include passive losses from the vacation rental as QBI losses on 8998-A, and the safe harbor was never elected (based on my read the vacation rental didn't qualify as trade or business in any event). Upon sale in 2020 the suspended losses were recorded as a Rental Real Estate Loss on Schedule 1 Line 5 but also recorded on Form 8995-A Schedule C Loss Netting and Carryforward as a QBI loss and included in the carryforward. Now in 2023, I have QBI income and it would save money to preserve the QBI deduction which will be reduced because of the large carryforward recorded in 2020 upon sale. Do I need to file an amended returns for 2020, 2021 and 2022 to correct the loss carryforward since the suspended passive loss was not QBI loss? Or can I just create a separate schedule with the correct (much lower) QBI loss carryforward for my records and input that value into the 2022 Qualified Business Income Loss Carryovers Easy Step?
Thanks for your thoughts.
