"Enter info about passive losses"

[adamgordon2002]

I have a rental income property and I'm using TurboTax to file my 2024 taxes, just as I've done for the last 10 prior tax years. After entering all my various tax information, Turbotax has performed a smart check over my filing and flagged my Schedule E worksheet (Carryovers to 2024 Smart Worksheet), asking me to input a 2023 operating loss for regular tax under the section for disallowed passive activity losses.

What amount do I put in the box?

I've searched this community for others reporting a similar problem. While many others have, there doesn't seem to be a clear answer that resolves my problem. Here's the additional steps I've tried unsuccessfully:

1. Opening my 2023 tax filling pdf file, I pulled up a dollar amount for the unallowed loss from Form 8582 Passive Activity Loss Limitations, Part VII Allocation of Unallowed Losses, Column C Unallowed Loss. However, entering this number produces the error: "sum of losses in individual years should not be greater than total loss"
2. The sum of losses error makes sense, given that the Carryovers to 2024 Smart Worksheet includes operating losses from the lines for Before 2018 and 2021. These amount summed together equal the unallowed loss amount from the 2023 Form 8582 (referred to in step 1 above).
3. I then tried leaving the Federal Review screen and went back to the screen "Enter info about passive losses" (under Wages & Income, Rental Properties and Royalties (Sch E)). Under the Regular Tax section, Operating Losses for each year from 2018 to 2022 are prepopulated and editable, but all amounts are zero except for 2021. 2023 is left blank, where I should be entering an amount. Below that is an uneditable total amount that also agrees with the amount I referred to in step 1 above. Note: there's no line on this screen for Before 2018.

Does this mean I should simply put zero for my 2023 operating loss? Presumably I have no additional amount I can allocate to 2023 since the total amount has already been allocated. Part of the reason I'm really struggling with this is because I'm not able to trace how Turbotax calculated the amounts on the lines for Before 2018 and 2021. There's no number in my 2021 tax pdf file (including all calculation worksheets) that ties to the amount that Turbotax has prepopulated in to the Carryovers to 2024 Smart Worksheet line for 2021 Operating Loss.

[PatriciaV · Accepted solution]

If you are unable to find losses on prior year returns, it's possible you had nothing to carryover to this year. That may explain the blank boxes on Schedule E Losses by Year. In this case, entering a zero may resolve the SmartCheck error message.