When I came to the passive loss carryover from previous years for my rental, there was a figure already there (although it is editable). Where did this come from?

mudlarkz · ‎June 1, 2019

I have looked on last year's return for this figure, but can't find it. Where will I find this figure?

Cindy0H · ‎June 1, 2019

The form from 2017 Turbo Tax would be Carryover to 2018 Worksheet. The federal form is form 8587 which is Passive Activity Loss Limitations.

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 2018 Smart Worksheet (final page - note this is a TurboTax supplemental schedule and not an IRS form).

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ttlongtimeuser · ‎June 1, 2019

I understand I can use my passive carryover loss, without limitation, when I sale the rental.  So, after I've entered the sale info in Asset Worksheet,  Sched. E line 22 posted the whole amount of carryover losses, incremented by current year's loss. This is because in the year of sale, I had no rental income only repair expanses while preparing property for sale.
1. Form 8582 Worksheet 1 column (d)  correctly calculated OVERALL GAIN/LOSS by subtracting from
    column (a) accumulated passive carryover loss ($160,000)
  and this is the last place I saw that $amount taken into consideration.
2. I checked 4797 and the gain from sale has been calculated as follows:
   sale price - adjusted basis + accumulated depreciation.
   No passive carryover loss taken into the account.
3.  Schedule D calculated capital gain based on 4797 calculated gain from sale.
4. Schedule D worksheet calculated 15% tax on capital gain
5. Schedule 1 line 22 calculated and adjustment to income by subtracting sale of rental from total capital gains
6. And that adjustment has been added to 1040 line 6 to increase Adjusted Gross Income.

Does that mean that the carryover passive loss I carried for years did not help me to lower the gain on sale the property and lower my capital gain tax?

When I came to the passive loss carryover from previous years for my rental, there was a figure already there (although it is editable). Where did this come from?

Investors & landlords

Investors & landlords