Prior years’ unallowed losses on rental property - repairs from 2018 that I did not deduct on Schedule E. Can I deduct this year or do I 1st have to amend prior returns?

[thadeus1]

I also don't see how to manually add them using the TurboTax program. Seems a little clunky.

[jtax]

You have to take the deduction for most expenses in the year in which those expenses are incurred. There are a few exceptions (e.g. companies but not individuals can have fiscal years, some improvements (not repairs) have to be deducted over multiple years (depreciation), etc.)

So if the 2018 expenses flow through to this year, I would indeed suggest getting an extension for 2021, amending 2018, and adjusting the carry forwards as needed. I would not wait for the IRS to acknowledge the amended return for this kind of item (unless the 1040X is efiled, then you know they got it).

For this kind of expense, which the IRS is not as likely to automatically track (unlike a 1099 or W2), you might get away with filing 2021 first and then amending. They might not even do anything with the 2018 1040X if it doesn't ask for a refund. But who knows?

[Edited: @AliciaP1 makes a good point. If the carryfoward appears on any forms you need to file subsequent years (2019, 2020) then you should amend those years. If it only appeared on a "for your records" worksheet I would think you don't need to amend. So if you are increasing the loss on Schedule E or 8582, etc. you would have to amend all of those years also.]

[AliciaP1]

You will need to amend prior years to report the additional deductions.  Tax deductions can only be taken in the year incurred.  If it creates a loss carryforward or a basis adjustment, the subsequent years will need to be amended as well.

[thadeus1]

Thanks.

[thadeus1]

Thanks.