How to apply one rental property's loss to another rental property's income? tried combined business but doesn't work.

[legendpeng]

hi, 

  i am a landlord and own 2 rental properties, one result in 8k loss and the other 6k income. i want to combine the 2 rental activities to offset the income and get better tax benefit (I am not real estate pro, and my income is more than 150k, so i can't deduct the loss if i treat it as separate activity.). i already selected on page "should this business be treated as part of a combined business" on each of my rental properties, but it doesn't work for me. I also verified on scheduled E there are 2 activities on line 1 a, but there is only one activity on form 8582 p2 which is the one that has loss, not sure if this is related and how to solve this in TT. 

if i understand correctly, i should be able to apply the passive activity loss of my first property to the income of my second property? if yes could you please let me know how could i do that in TurboTax?

[AnnetteB]

Go through the General Property information for each property and be sure that the Active Participation question is answered the same way for each one.  

[legendpeng]

yes I already selected Active Participation on each property at the beginning. the only thing that i recalled is when i added the second properties i deselected combined business because at that time i don't know what does it mean. only after i noticed that my loss is not applied then I selected combined business to try and it's still not working as expected, that is why asking here.

[AnnetteB]

Can you verify what line 26 of your Schedule E is showing?  If the properties are being combined, it should show about $2k loss based on your question.

[legendpeng]

schedule E p1 line 26 is showing about 6k income. line 25 is 0. line 22 A is 0 as well, that is why i traced to form 8582 p2 and noticed there is only one property listed there.

[AnnetteB]

Would you be willing to send a diagnostic copy of your tax file so that we can try to determine the source of the issue?  If so, please follow these instructions:
- sign in to your online account and go to your tax return
- select Tax Tools in the menu to the left
- select Tools
- select Share My File with Agent
- a pop-up message will appear and you will need to select OK to send the sanitized diagnostic copy to us
- you will also need to provide the token number that is generated by typing it in a comment below

[legendpeng]

sure! to be clear i am using Premier Mac version of TT. after login to my online account i don't see a "Tax tools" in the menu to the left, all i have seen is "Tax Home", is it because i am not using online version of TT?

[legendpeng]

i just tried creating a initial version of online return and was able to see the tools and share with agent menu. looks like this is an option only applicable for online version. for Mac version is there acsimilar feature/tool?

[AnnetteB]

Based on the information I could see with your question, it appeared that you were using an online version so the instructions were for the online version.  Let me check for Mac instructions.

[AnnetteB]

On the top of the screen while in your tax return, choose Help, then select Send Tax File to Agent.

[legendpeng]

this is awesome! and thanks a lot for the help. it's $5,087.17 please take a look

[legendpeng]

FYI i got an error "Sorry, your account is being reviewed as it may be in violation of our Terms of Use" when sharing the number with you that is why i use the currency format above. please remove $,. etc .

thanks again!

[AnnetteB]

Question:  was the second property listed your primary residence that you converted to be a rental property in 2018?

[legendpeng]

yes the 2nd property has been used as primary residence before converted to rental property starting Sep 2018. and first property has been used as rental property since 2017, and it's imported from TT 2017 file.

[AnnetteB]

Thank you for sharing your file.  See the answer below and let me know if these steps do not work.