@AmyC, I have found your posts to be very helpful and informative, so I am hoping that you could answer my question.
I have been using TT for over a decade, but there seems to be an error in the Schedule E worksheet for TT2021. I am an active participant in two rental properties: one of them generates income, but the other one results in a loss every year, due to depreciation. Up until TT2021, I was able to offset the income from the first property with the loss from the second property on my Schedule E. However, this year the loss on Schedule E is set to zero by TT, with some of the depreciation allocated to column (d) Vacation home loss limitation. However, this is NOT a vacation home and had 0 days of personal use all year.
I am NOT a real estate professional. The following information is filled out on the Schedule E worksheet (same as all previous years):
(C) Active participation - Y
Days of personal use: 0
According to IRS publication 527, Chapter 3, I should be able to deduct up to $25,000 of loss from this property:
Exception for Rental Real Estate With Active Participation
If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities. Similarly, you may be able to offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception.
How do I override the incorrect deferral of depreciation on Schedule E for the second property, so that I can claim an overall loss for the year?
