Hi all, i am qualified for the special allowance of rental properties $25000 as i am a active participant to my rentals. On form 8582, it's showing i can allowed $25000 of passive loss to offset ordinary income. But my ordinary income is only $3k, so it's creating a negative AGI of $21K. Negative AGI doesnt have the loss carry forwad benefit. How can i elect to allow using just enough passive loss to offset the AGI to 0? The system seems to default it to $25000 only and i cant override the amount.
Does that mean I am losing the $22K loss that exceeded my ordinary income, that it was used for no benefit?? This is on my 2016 fed return, do i need to amend it? Or is the IRS smart enough to know I shouldnt need to use all $25K special allowance but $3k, so I still have $22k passive loss unallowed to carry forward to next year?
