On my Schedule E, Part 1, I have income on line 24 from royalties (mineral rights I own on several properties). On line 32 of Part 2, of Sch. E, I am showing $0 because Form 8582 says I have no passive losses allowed. I actually had large losses under the LLC I own with two partners that has a rental property. However, Form 8582 eliminates these large losses because my income is greater than $150k.
Shouldn't I be able to offset my royalty income with my real estate loss even though the former is personally owned and the latter is from an LLC? If I personally owned the rental property, it seems clear that the two would offset in Part 1 of Schedule E. If I can offset these two between person and LLC, how do I do it?
