I have an at-risk loss carryover from prior years. Does TurboTax automatically include this in it's calculations, or do I need to enter it? And where?

[denise6]

We had losses for two of three Sch C businesses over the past couple of years. I thought TurboTax had automatically included the carryover from 2022 to 2023, but I got confused this time around.

[AmeliesUncle]

It is extremely rare for a Schedule C to have "At-Risk" carryovers.  Most likely, you were "At-Risk" and the loss should have been allowed in the year of the loss.

Why do you think you were not At-Risk that the loss would not have been allowed?

[denise6]

Hmmm. The loss carryovers have been happening since our business was hammered in the recession of 2008-2011. After we moved from California to Colorado a number of years ago, we've had business losses off and on as well. Going clear back to the California tax forms - done by our CPA at the time - the at-risk box was always checked, so I (probably without knowledge of why) had copied when I started using TurboTax. In previous years, I hadn't even thought about it, but this year TurboTax flagged it with a dialog and question about whether I'd entered the loss carryover from 2023 in my current year's expenses. That's what raised the question I just asked.

[AmeliesUncle]

As I mentioned before, generally a Schedule C will be fully "At-Risk" which would mean the losses are used, not carried over.  But you can check the details for "At-Risk Amounts" in Publication 925.

https://www.irs.gov/publications/p925#en_US_2024_publink1000104692

Assuming you were fully "At-Risk", there is carryover.  If the losses were large, you may consider amending prior tax returns to use the losses.

[denise6]

I actually lost track of my original question, which was to find out if TurboTax automatically carries over the amounts from the previous year to the current year, without needing to enter it manually. I read the section in Publication 925 and the Forms and Instructions referenced (I had to grin at item 6. under the At-Risk Activities definitions: Any other activity that is not included in (1) through (5) above, which makes it sound like literally anything fits!). However, thank you for helping to educate me - it's much appreciated!