Background: I have a rental property. I actively participated in management/repair decisions but did not have 750 hours working on it a year (not a real estate professional). So I believe this is still a passive activity. Also, I down paid 20%. I have landlord insurance and rent it out for 100% of the year.
When I filed the tax report last year, which was the first year of reporting income on this rental property, TurboTax calculated my loss of 10k due to maintenance, interest, and depreciation. This year I directly asked Turbotax to transfer the data from last year.
Question: When I file the tax report in this year, I need to figure out how to carry over the 10k loss from last year to this year. In TurboTax, there are two checkboxes, I can choose one or both.
1. "I have passive activity real estate losses carried over from a prior year"
2. "I have at-risk losses carried over from 2022"
If I choose 1, it will ask me for regular tax carryovers and AMT tax carryovers based on schedule E, which I believe is -10k. It will add this 10k to form 8582 directly
If I choose 2, it will ask me for regular tax carryovers on schedule E, which I believe is -10k. It will add this 10k to miscellaneous expenses as "SECTION 465(d) CARRYOVER".
I thought I should choose both option 1 and option 2. Because my loss is a passive activity, I should choose option 1. And my loss is at risk, so I should choose option 2 as well. However choosing both will add the carryover twice, which is -20k. Based on the final result, it seems that I should not choose both.
Can someone help me and instruct me on which option I should choose?
