Investors & landlords

Capital gain income is not normally passive income, so you may not be able to offset your passive losses with your capital gains. Most of the time capital gains are investment income, which is different from passive income.

If your passive losses were allowed to be applied to ordinary income, as may be the case with rental income in some circumstances, an unused loss would not qualify for a passive loss carryover. It would only be allowed as a net operating loss (NOL) carryover. As such, it would be available to offset ordinary income in the following year. TurboTax does not support the net operating loss calculation, but you can calculate it on your own and enter it in the following year tax return by using the query box on your menu bar and entering NOL, where you will see a "jump to nol" option:

You would need to go back and amend your returns to report the NOL carryover. You can only go back three years from the due date of a tax return to receive a refund of prior year taxes though.