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Level 1
posted Apr 13, 2024 4:58:39 PM

How do I claim expenses from a previous year to offset income from rental arrears received this year?

My disabled daughter lives in my home and pays for room and board from SSI.  With deductions it's a wash and I don't owe any tax on it.  My issue is that her benefits were suspended for over a year due to an SSI error, and then reinstated with arrears paid from a previous year.  I understand that I have to declare the income from the arrears in the year I received them, but how can I claim expenses?  The expenses were in a previous tax year.  

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1 Replies
Expert Alumni
Apr 13, 2024 5:05:22 PM

If you are reporting this as a rental on schedule E, you should have reported the expenses last year, 2022.

Because rental income is passive income, the loss would not have been allowed, but would be a carry-forward for 2023. 

This carry-forward loss would offset the additional income you finally received in 2023. 

 

If you didn't do it this way, amend 2022, claim the expenses and get the carryover loss.

 

Link on how to amend