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xx01632
Level 1

Passive loss for 2018 & 2019 on rental house sold in 2020- 2 questions

For 2018 & 2019 there were NOL's reported and form 8582 was attached to the taxes filed.  The property was sold in 2020.  I reported the NOL during the question period for Less common Business Situations.  My tax amount due was reduced but not at a dollar for dollar rate for the amount of the loss.  Question 1 What am I missing as I thought it would be dollar for dollar, (i.e. $30,000 PAL would reduce taxes due by $30,000).   The renters moved out 12/31/2019 and we began getting the house ready for sale.   There was no form 8582 printed for 2020 as it said it was not a rental property since there was no activity for 2020.   Question 2 Do I need to change the way I answered the question or submit manually form  8582 from 2019?  Thank you very much in advance. 

7 Replies
Carl
Level 15

Passive loss for 2018 & 2019 on rental house sold in 2020- 2 questions

What am I missing as I thought it would be dollar for dollar

If you took a $30K loss on the sale, that does not mean you get to deduct the loss from your tax liability dollar for dollar. It means you don't pay taxes on that $30K.

MikeinSC
Level 4

Passive loss for 2018 & 2019 on rental house sold in 2020- 2 questions

1) Losses offset income, not taxes.  If you have a loss you can recognize, it will reduce your income, so if you are in the 20% tax rate, a $1,000 loss means $200 less taxes.

 

2) You reference NOL (Net Operating Losses) and the 8582 - which is for Passive Activities.  Net Operating Losses are when your taxable income is negative and there are special rules to compute how much of that is carried forward to the next year as a NOL.  On the  the other hand, 8582's show Passive Income and Losses - if you had net PAL that you could not use - i.e. suspended, it is shown on that form and carried forward to the next year's  8582.  I would look at your 8582 for 2019 and see if all your losses were allowed to be used.

xx01632
Level 1

Passive loss for 2018 & 2019 on rental house sold in 2020- 2 questions

You are right, I was using the wrong terminology.  It was a passive activity loss on form 8582.  Both the 2018 and 2019 losses were not allowed to be used as we made over $150,000.   In 2018 and in 2019 the 8582 forms were printed with the tax filing.  Not sure why they do not show up for the 2020 filing.  

xx01632
Level 1

Passive loss for 2018 & 2019 on rental house sold in 2020- 2 questions

I was hoping!!!! but was wrong.   Thank you

 

MikeinSC
Level 4

Passive loss for 2018 & 2019 on rental house sold in 2020- 2 questions

If you have suspended losses from passive activities, you can use these losses to offset any gains on the sale of the passive activity in 2020 (even if not rented in 2020.) 

xx01632
Level 1

Passive loss for 2018 & 2019 on rental house sold in 2020- 2 questions

My question is then why is the 8582 form not printing and it is not carrying over as it did in 2019?  Turbo Tax employee experts, do you know of a problem with the software??

xx01632
Level 1

Passive loss for 2018 & 2019 on rental house sold in 2020- 2 questions

I have found the long term capital loss carryover.  It shows up on Schedule D, Capital gains and losses.  Thanks to all that helped me with this issue.  Now just waiting for TT to update for form 2210.  

 

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