I had a passive loss on rental property (my first year as a landlord), yet TT limited my rental expenses to the exact amount of my rental income.

[valbrown1234]

Why wasn't a form 8582 automatically filled out by Turbo Tax, showing my carryover losses?  I am not very confident at this point that Turbo Tax Premier is serving me well.

[TaxGuyBill]

Did you enter an "personal" days?

Was it personal use property that was 100% converted to rental property, or does it go back-and-forth between personal and rental use?

[valbrown1234]

Thanks for your response.  I entered personal use of 48 days, which is the time I occupied the house before I turned it to rental property.  The remainder of the year was pure rental.  I reported only rental property related expenses, yet the program prorated my expenses between personal and rental.  Additionally, schedule E did not show a loss, which should have been approximately $7K, but reduced the expenses to exactly the income reported, thus reporting a loss of 0.  My understanding is that the loss should have been reported on Form 8582, so that it could be carried forward to offset future rental income.  I wonder if my MAGI is the problem, as we are a high income household.

[TaxGuyBill · Accepted solution]

Enter zero personal days.  It is an easy mistake, but if you read that screen carefully, it asks for the number of personal days after it was converted to rental use.

That will allow the loss.  If your income is too high (over $150,000), that loss can't be used on your current year tax return, but will be carried to next year via Form 8582.

However, you will need to manually prorate the amounts for some expenses, such a mortgage interest, real estate taxes, and howeowner's insurance.  Be sure to only enter the amounts that apply for the rental period.

[valbrown1234]

Question #1 answered and acknowledged.  Thank you.  However, a net loss was still evident based on my rental expenses, yet did not populate on Schedule E, and Form 8582 thus was never generated.  I will revised the # personal days and see if that makes a difference in the outcome.  If is okay, I will post again with the results and would appreciate your continued help.  Thanks again.

[TaxGuyBill]

Yes, that's okay.  When you enter zero personal days, that should fix the problem.

[valbrown1234]

TaxGuyBill, it worked!  Thank you so much!  Just goes to show how misinterpretation of instructions can totally mess you up.  Thanks to guys like who are willing to help out novices like me.

[TaxGuyBill]

You are welcome.