@dhardegree wrote:
How about help with this one - I have a final limited partnership K-1 with a Section 1231 gain. TurboTax transfers this to form 4797 and uses it to reduce my long term capital loss carry forward from last year, therefore no tax. I also have rental property schedule E with a loss carry forward and turbo tax is also using the K-1 Section 1231 gain to reduce the schedule E loss carry forward. The net calculates a reduction in income and reduces both my capital loss carry forward and my Schedule E loss carry forward. This is double dipping. The schedule E loss carry forward should not change since I used the Section 1231 gain against capital loss carry forward. I can not figure out how to correct this in the software.
I think the software is doing it correctly.
The final K-1 gives you a passive gain. While that allows the passive losses to be 'released', you still need to account for the passive gain, which is why it is still reported as a capital gain.
