Hello,
I am filing a joint return and my spouse will qualify as a Real Estate Professional while I do not. We receive real estate losses via a K-1 from our 50%-50% LLC. Since at least one of us does qualify, we can deduct those passive activity losses.
When entering the K-1s, the TT interview asks about my status as a professional. I guess my K-1 is the first to come up in the interview based on imported 2020 data. Regardless of how I answer, the interview will never ask the questions for the 2nd K-1 for my wife. The deductibility of our losses is then based solely on the answer I gave for the 1st K-1.
As stated in the TT interview instructions:
Joint Returns:
These requirements are not met if your spouse separately satisfies them.
Thus, I answer "No" to the qualification questions as they pertain to me. The interview does not cover this ground for the 2nd K-1 for my wife.
Furthermore, once I answer negatively to the Real Estate Professional tests, the interview will NEVER as me again even when reviewing the K-1 for potential changes. If I enter an affirmative answer, the interview will review if I chose to go back over this -- but NOT if I answered negatively the first time.
I believe the correct interview logic is that TT should ask the qualification tests for each K-1. Furthermore, the interview should review answers to those questions when reviewing K-1.
