Large passive loss with negative income

Forum|Forum|5 years ago
November 11, 2020
2 replies
40 views

If you have a large passive loss from schedule K rental income, and $0 other income:

- With active participation do you lose the $25k deduction since you already have $0 income and the deduction would bring you to -$25k? If not how do you carry it forward to next year as an NOL in TurboTax?

- Without active participation where would it show up as a carryforward to next year? I'm not seeing it on the carryover worksheet.

Thanks

Best answer by Anonymous_

@cindi11 wrote:
- With active participation do you lose the $25k deduction since you already have $0 income and the deduction would bring you to -$25k? If not how do you carry it forward to next year as an NOL in TurboTax?

Yes, in the instance described you would lose the $25,000 special allowance and there is no carryforward of the special allowance that is not used to offset nonpassive income in a current tax year.

See https://www.irs.gov/publications/p527#en_US_2019_publink1000219124

I.R.C. §469(i)

Anonymous_Answer

Level 15

@cindi11 wrote:
- With active participation do you lose the $25k deduction since you already have $0 income and the deduction would bring you to -$25k? If not how do you carry it forward to next year as an NOL in TurboTax?

Yes, in the instance described you would lose the $25,000 special allowance and there is no carryforward of the special allowance that is not used to offset nonpassive income in a current tax year.

See https://www.irs.gov/publications/p527#en_US_2019_publink1000219124

I.R.C. §469(i)

Anonymous

without active participation, the c/o is only shown on the schedule e worksheet.