Re: Sched E Partnership and S Corp Inc/Loss Flow T...
Level 3

Investors & landlords

A bit more background.  In both 18 and 19, there were LTCGs from passive investments (without active role), the majority of which were real estate LLCs.  These were offset against Sched D loss carryforwards.  In 2019, the LTCGs were smaller than the losses that were allowed as negative income.  2019 numbers are larger than 2019 1231 gains or 2019 NOLs.  2018 NOLs are larger than 2018 negative income.  Seems to suggest relationship between sum of current year loss and carryforward loss, on the one hand, and current year negative income, on the other.  2018 1231 gains are roughly equivalent to 2018 LTCGs. 

 

If losses were passive, are they converted to active if capital gain loss carryforward is used to satisfy any tax liability otherwise resulting from LTCGs?  

 

How are the LTCGs and negative income numbers determined?  If taken as negative income in year 1, are there any circumstances where they can be taken again in later years?  In either case, is there an easy and effective way to both anticipate magnitude of future negative income and likelihood that it will be applied to a given tax year's return?  

 

Some questions repeat from original post.  Other questions from original post remain.  Please read in totality for most complete response possible.  Reference to sources helpful, if available.  

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