Amendment requirement for increase in Prior Year Carry over Loss from Rental Real Estate form 8582

[Kishore_Susmita]

Do I have to amend the following few years tax returns for an increase in the form 8582 loss from a few years back? Or can I just update the next year 8582 available loss with change from a few years back?

I had schedule E rental losses in all years from 2020 to 2023. I filed my taxes for all of those years. Now I am noting that I had a bigger loss in 2021 and need to increase the carry forward losses to roll to 2023 or 2024 directly. This will give me a larger form 8582 loss in 2024 but will not change any other calculation or tax liability in the years 2020 to 2023. Do I have to amend the full 2021, 2022 and 2023 tax returns to benefit for this increase in 8582 loss from 2021? Or can I just amend 2021 and its form 8582 and just change the beginning carry over loss in 2024? Do I have to amend 2022 and 2023 tax return in order to increase form 8582 loss carry forward?

[Mike9241]

please clarify, did you understate the loss on schedule E or is there some other reason the PAL c/f is incorrect? 

[Kishore_Susmita]

I did not include property depreciation and water bill payment in Schedule E in 2021. Once they are included the 2021 Schedule E loss gets even bigger. Previously in I had enough loss carry over from 2021 to offset all of small 2022 Rental Profit and then there were more loss in 2023 that added to to the loss carry over balance. However, the schedule E did not have any affect on Schedule 1 or the main 1040 AGI and tax liability as I was not able take any of these loss to net against my other W2 or Schedule D incomes. However, I would like to take all available loss from all of these initial years (mostly due to depreciation) and use them in the future years to offset Schedule E rental income when I will not have depreciation expense and will have more stable rental. Can I just include the additional 2021 loss in my 2024 Loss Carry over worksheet or do I also have to amend 2022 and 2023 Tax returns? If I do have to send in amendments for the years 2022 and 2023 then should I send all of the 1040, schedule A, Schedule D etc. or should I just send in the Form 8582 for these years?

[Mike9241]

to be honest I've seen conflicting info on the web

since 2021 needs amending, I would recommend amending 2022 and 2023. If the IRS looks at the 2024 8582, likely, they'll only look back to 2023 and see a discrepancy.  It won't realize 2021 has been amended. if this happens you would have to deal with correspondence with the IRS that you may not receive until it's too late to amend 2022 and hence revise the c/f loss to 2023 and 2024.  Also, if you have multiple properties and made use of the $25,000 special allowance, amending all years is needed because each property gets an allocation of the $25K which would change the separate properties PAL c/o. This would be important should you dispose of any of them.   

see if others  give you their opinion.