@atnovanow so disappointing. Thank you for your patience. At this point, I don't recall exactly what I had written up, but I believe the gist of it was how to properly modify the Schedule E works...
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@atnovanow so disappointing. Thank you for your patience. At this point, I don't recall exactly what I had written up, but I believe the gist of it was how to properly modify the Schedule E worksheet associated with Passive Operating Losses. Here's how I understand things, so please do not take my word as gospel, I'm not a tax professional--though I have spent many hours looking through all sorts of tax code and forum posts related to this issue. The value that was not carried over from the prior year is the value in Form 8582 (Passive Activity Loss Limitations), Part VII (Allocation of Unallowed Losses), Column C (Unallowed Loss). You should have this form in your tax return from 2024, and previous years. That value is inclusive of all prior year unallowed losses, so if you have a value in that form for 2023, 2022, 2021, and so on, each of those values given are inclusive of all prior years. Here's what that may look like, say your first year with a passive operating loss was 2020, and you had various values from then until now: 2020: -3,000 2021: -4,500 2022: -3,500 2023: -5,500 2024: -6,500 What that really means, is: 2020: Loss of 3,000 2021: Loss of 1,500 2022: Profit of 1,000 2023: Loss of 2,000 2024: Loss of 1,000 I included a profit year example, because that makes things interesting when it comes to entering the data into the worksheet. From what I understand, the IRS treats suspended losses in a "first in/first out" way, which means any profits will be applied to the earliest suspended loss. Here's what that looks like, when entered in your Schedule E Worksheet (both regular tax and QBI): 2020: -2,000 (reduced from 3,000, due to profit in 2022) 2021: -1,500 2022: 0 (made profit this year) 2023: -2,000 2024: -1,000 2025 (the carried over value): -6,500 As you can see, the sum of the individual years will equal the total carried value for 2025, thus being inclusive, and reconciling appropriately. Now, that having been said--there was STILL an issue with my Schedule E worksheet, even when I manually entered all the values and they all totaled up correctly. Potentially a rounding error somewhere on the form that I couldn't see; so I ended up just zeroing out all prior years, and just including the carried value from 2024 in the current value, which should still work, given that it's inclusive. I also understand that the worksheets are not submitted with the return anyways, they're just a tool to error check along the way; so as long as the current year value is correct, your Form 8582 should get filled out correctly and submitted. Hope this helps!