Investors & landlords
First, A section 465(d) carryover would come from your indication on a previous' year's tax return that your overall loss was not deductible because you were not "at risk".
- Simply put, you are not "at risk" if the money you have used to pay for expenses is not yours to lose (i.e. you have a loan, but don't need to pay it back because nothing secures it). Its possible to not be at risk, but its not common. If you are fully at risk, you should carryover the full amount of a loss you were unable to use.
For 2023, enter your passive activity loss (PAL) carryover from your 2020 return (Form 8582, Worksheet 5, Column C), using the steps below.
The following instruction should help you with the location to enter your carryover loss. You must go into the rental property income section first, then follow the steps to enter your carryover loss.
- Any passive activity loss (PAL) carryforwards allowed would be listed on your Form 8582, Worksheet 5 or 6, in your 2022 tax return as 'unallowed loss'. If you have a PAL and it does not seem to be populated in your 2023 tax return you can take the following steps to enter it.
- Use the magnifying glass to Search (upper right) > Type rentals > Jump to Rentals > Select Edit beside your Rental Activity > Under Less Common Situations > Review Carryovers, limitations, at risk info, etc. > Continue to enter your passive loss carryover. See the image below for assistance.
