A passive loss carryover is created when you have more expenses than income (a loss) from passive activities in a prior year that could not be used that year. Instead, the passive loss is carried forward to future tax years to offset any passive income. The loss continues to be carried over until you use up the entire amount.
Passive Loss Carryovers can be created by any passive activity. Most come from rental properties (Schedule E). If you used TurboTax to file your tax return last year, any
Passive Loss Carryovers would appear on Schedule E Wks - Carryforward to 2016 Smart Worksheet
(final page - note this is a TurboTax supplemental schedule and not an IRS
form). See screenshot #1 below - click to enlarge
If you had more than one property, or you
didn't use TurboTax last year, Passive Loss Carryover appears on Form 8582 Page 2 Worksheet 5 (screenshot
#2). For AMT, look for the same form with "ALT MIN TAX" under
the form title (screenshot #3).
[revised 3/20/17]
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