Hello,
If Rental A had been converted into Primary residence last year. How can I carry forward the Suspended losses from Rental A to the following year so the losses can be used to offset income from Rental B? If I remove Rental A from Schedule E, the suspended losses for Rental A is gone from Form 8582 in TT.
Please advise, Thank you!
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@chanhiu wrote:
So using RentalA's carryover suspended losses (after converted personal) to offset Rental B's income is allowed, correct?
If so, I could overwrite Form 8582 to include RentalA's losses and paper file for 2024. T
I think so.
I would not recommend it. You can't override that form in TurboTax and if you start manually doing things you are more likely to make a mistake somewhere. As I said before, I would choose the lesser of two evils and file a blank rental with zero days.
I concur with @AmeliesUncle; go the "blank rental with zero days" route.
That approach, although not great, won't look quite as bad since you have another rental to report. Further, note that you would be unable to utilize the "0 rental days" route if this was your only rental.
See the thread below (particularly the last post, unfortunately):
Thanks tagteam. So I still dont fully understand. Can I keep Rental A on Sch E with $0 income/expense so the losses will flow thru and can offset with income from another rental? If so, does TT allow you to input 0 days for rental & personal days? Also, will this cause any red flag for the IRS?
I just didn't want to override anything in TT (like on form 8582) since it will error out when efiling. Thanks again!
I believe what @AmeliesUncle is saying in that post is simply that TurboTax does not handle this scenario properly.
You can't report a passive loss for a rental property during the interview without also reporting a rental property. If you try to input 0 rental days, the program will delete the Schedule E.
Hi again, looks like the link you referenced earlier was from 2020. I actually found this newer (2024) link: https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/how-to-add-a-suspende...
I see that Mike9241 also mentioned inputting 0 days and 0 income/exp could be the work around.
So if I do that, then Rental A will show a loss, and Rental B will show a profit on Schedule E. And the carryover suspended loss would be used up per Form 8582. I just tested in 2023 TT and it did not give me any errors when I ran the error check & review analysis. However, since the efile window is closed, I can't do the efile check so not sure if it will pass that.
I just wanted to reconfirm if this is the correct work around and if it will raise any red flag to IRS? Since I'll report a rental that's been converted to personal use in order to force the suspended losses to come through.
Thank you again!
I'm going to wait for @AmeliesUncle to weight in here, but it's fairly clear that TurboTax does not handle this scenario properly and an input of 0 rental days and 0 personal days would certainly look weird on a Schedule E.
Great thanks!
The program might let you enter 0 rental and 0 personal, but you would then be reporting that you DO have a rental property. You DON'T have a rental property, so there should NOT be a Schedule E showing a rental.
The program is faulty and won't let you continue to report the passive loss on 8582 without the Schedule E.
I suspect that most people just don't file the required 8582 during those years, but that is wrong and could potentially lead to problems in the future.
You could file the 0/0 Schedule E in order to keep filing the 8582; even though that is wrong, that might be the lesser of two wrongs. Because you have a second rental property, this is your better option (the best option is to use different software that actually does it correctly).
Thanks AmeliesUncle,
So using RentalA's carryover suspended losses (after converted personal) to offset Rental B's income is allowed, correct?
Put the TT technical issue aside, If Rental A is removed from Sch E, could A's carryover losses remain on Form 8582? If so, I could overwrite Form 8582 to include RentalA's losses and paper file for 2024. The losses should be used up in 2024. Would it work?
Thanks again!
@chanhiu wrote:
So using RentalA's carryover suspended losses (after converted personal) to offset Rental B's income is allowed, correct?
If so, I could overwrite Form 8582 to include RentalA's losses and paper file for 2024. T
I think so.
I would not recommend it. You can't override that form in TurboTax and if you start manually doing things you are more likely to make a mistake somewhere. As I said before, I would choose the lesser of two evils and file a blank rental with zero days.
I concur with @AmeliesUncle; go the "blank rental with zero days" route.
That approach, although not great, won't look quite as bad since you have another rental to report. Further, note that you would be unable to utilize the "0 rental days" route if this was your only rental.
Thanks AmeliesUncle. I will go with the 0/0 Sch E route. Thank you for your help!
Thanks tagteam. I do have an active Rental B so I will go with the 0/0 Sch E route for Rental A. Thank you for your help!
I'm in a similar situation, having carried-over passive losses from a rental property I converted to a second home in 2024. And I didn't rent at all in 2024, thus Turbotax wants to delete Schedule E.
But I have no passive income against which to deduct these losses (unless investment income such as dividends counts). Am I out of luck for taking the loss this year ? Is the issue simply how to carry the losses until I sell ?
Here's one (admittedly sketchy) option for getting around Turbotax deleting Schedule E and therefore not carrying-over the passive loss into Form 8582 ...
Claim one non-existent night of rental, and 19 nights of personal use. Turbotax will happily fill out Form 8582 with the carried-over passive losses. There will be no depreciation expense (I guess since there's more than 14 days of personal use) and it'll only add 5% of your expenses. Claim rental income equal to those expenses. So your total loss is equal to the carried-over amount, just as it should be.
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