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mike_steder
New Member

I sold a rental property in 2018 and I have carryover passive losses to claim this year. How do I add the property in TT and claim losses if not already in TT?

TT won't let me add the rental property because it was sold in 2018 and not rented in 2019.
3 Replies
tagteam
Level 15

I sold a rental property in 2018 and I have carryover passive losses to claim this year. How do I add the property in TT and claim losses if not already in TT?

When you dispose of rental property to a third party in a fully taxable transaction, all suspended (disallowed) passive losses are released; there are no carryovers.

 

You may, however, have had an NOL (net operating loss) as a result of the sale in 2018 so you should check your 2018 return and calculate a NOL (if necessary).

 

See https://www.irs.gov/publications/p536#en_US_2019_publink1000177330

Carl
Level 15

I sold a rental property in 2018 and I have carryover passive losses to claim this year. How do I add the property in TT and claim losses if not already in TT?

Depending on your AGI, your carry over losses taken against other ordinary income could have been limited to $3000 or less. If you sold the property in 2018 and correctly and completely reported the sale on your 2018 tax return, then you should not have anything on SCH E concerning this property on your 2019 tax return. To enter/claim your carry over loss first take a look at the IRS Form 4952 line 7  from your 2018 tax return to get the amount dissallowed/carried over total from the 2018 sale. (f you don't have this form, then you don't have any carry overs to claim. Period.)

In TurboTax 2019 under the Deductions & Credits tab scroll down to the Retirement & Investments section. Under the section elect to start/update Investment Interest Expenses. Select YES. The 4 entry boxes you see there are "CLEARLY LABELED FOR TWENTY NINTEEN so you will NOT enter anything in ANY of those boxes. 

Below the boxes you need to check that box for "I have 2018 investment interest expense carryovers".  Then fill in the amount(s) and continue.

tagteam
Level 15

I sold a rental property in 2018 and I have carryover passive losses to claim this year. How do I add the property in TT and claim losses if not already in TT?


@Carl wrote:

.....your carry over losses taken against other ordinary income could have been limited to $3000 or less.


That would only be true if the loss happened to be a capital loss. In this instance (the sale of rental property) it is an ordinary loss, not a capital loss. As a result, there is no $3,000 loss limitation.

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