disallowed passive operating loss

[halstax1]

schedule  E work sheet, "sum of losses in individual years should not be greater then total loss"

Do not understand what they are looking for or where to find the numbers.

[Irene2805]

The message is saying that the loss you entered for a individual previous year is greater than the total losses for all years combined. 

To check your Passive Activity Loss Carryovers from a Prior Year for your Rental Property in TurboTax Premier: 

1. Click Federal Taxes > Wages & Income
2. Scroll down to the Rental Properties and Royalties section
3. Click the Start/Revisit box next to Rental Properties and Royalties (Sch E)
4. On the Rental and Royalty Summary screen, click the blue Edit button next to the rental you'd like to review.
5. Click Continue until you reach the screen entitled Do any of these situations apply to this property?
6. Check the box next to I have passive activity real estate losses carried over from a prior year.  
7. Click Continue
8. You'll be able to input the carryover amounts on the next screen.

[halstax1]

I have turbotax "Home and Business"  This is my first year doing My own taxes. Please bear with Me

If I sound a little "Stupid" but I'm still having a hard time with this section. The difference between "disallowed" "carry over" And QBI  is really confusing to Me.

[AmyC]

Disallowed - means that you can't take the loss this year.

Carry-over- means that you are allowed to put it on some forms and carry the loss into next year. You might be allowed to claim some of those disallowed losses next year.

QBI- qualified business income comes from several places. The income must be positive in order to take the 20% reduction. Please see this IRS article on QBI. The different types of incomes are at the top and you can choose the link that suits your income. 

We are glad to help!

[pat1668]

TT Premier bounced my return after e-Filed saying "sum of losses in individual years should not be greater than the total loss" in Schedule-E "Disallowed Passive Losses".  I had no loss in 2018; -$20,228 in 2019; -$22,407 in 2020; and -$31,767 in 2021.  TT Premier calculated a number for me but was rejected by itself.  What should I enter in the appropriate columns under "Regular Tax" and "QBI"?  I don't have other QBI incomes. I am confused.... 

[AliciaP1]

There is a known issue with the entry of QBI losses in TurboTax.  There is an update being posted on April 8, 2022, that will resolve the issue.  If you are using one of the desktop versions you will need to install the updates prior to proceeding.

@pat1668

[pat1668]

Is there a way I can get the update from Intuit without waiting for a week?  I can't afford to waste any time when the submission deadline is looming but thanks for your tips!

[AliciaP1]

Unfortunately, no.  4/8 is the release date provided by TurboTax for the software correction.

@pat1668

[pat1668]

OK and I'll wait.  Thanks for your advice.

[pat1668]

The April 6th update did not change anything.  All my TurboTax entries were correct after checking with previous years' passive losses.   Both the "Regular Tax" and "QBI" columns are shown below.  It was a very simple tax return:

2018  0             0

2019 -20,228 -20,228

2020 -22,407 -22,407

What can go wrong?  Now I can't file my return.

[pat1668]

After two hours on the phone with a TT CPA , he found TT transferred the wrong number from last year Tax Return forms which did not account for all the previous years losses.  Case closed and thank you.

[kunanrod]

Please advise how did you fix the transfer error. I have yet found a way to correct it. Thank you.

[kunanrod]

I have a desktop version. Prior releases were downloaded automatically but not this release. Please advise how to download this release myself. Thank you.

[PatriciaV]

To manually update TurboTax for Desktop, open the software and click Online in the header. Then choose "Check for Updates." 

See also: Manually Update TurboTax for Windows Software (Basic, Deluxe, Premier, Home & Business)

[g-chan]

It is trying to add up all the "disallowed passive losses" in the previous years and make sure they add up to the sum. It blocked me from e-filing and took me a long time to trace the issue. I looked under the smart worksheet for Sch E for the property in question. For 2022 tax year, TT add everything from 2018 to 2022 and calculated what is "prior to 2018" to get the "total loss". However, when it did the math described in the first sentence, the "prior to 2018 loss" was not taken into account, causing this inconsistency error. After I manually adjust the "total loss" to reflect only from 2018, it fixed the error in my case.