"Enter info about passive losses"

[adamgordon2002]

I have a rental income property and I'm using TurboTax to file my 2024 taxes, just as I've done for the last 10 prior tax years. After entering all my various tax information, Turbotax has performed a smart check over my filing and flagged my Schedule E worksheet (Carryovers to 2024 Smart Worksheet), asking me to input a 2023 operating loss for regular tax under the section for disallowed passive activity losses.

What amount do I put in the box?

I've searched this community for others reporting a similar problem. While many others have, there doesn't seem to be a clear answer that resolves my problem. Here's the additional steps I've tried unsuccessfully:

1. Opening my 2023 tax filling pdf file, I pulled up a dollar amount for the unallowed loss from Form 8582 Passive Activity Loss Limitations, Part VII Allocation of Unallowed Losses, Column C Unallowed Loss. However, entering this number produces the error: "sum of losses in individual years should not be greater than total loss"
2. The sum of losses error makes sense, given that the Carryovers to 2024 Smart Worksheet includes operating losses from the lines for Before 2018 and 2021. These amount summed together equal the unallowed loss amount from the 2023 Form 8582 (referred to in step 1 above).
3. I then tried leaving the Federal Review screen and went back to the screen "Enter info about passive losses" (under Wages & Income, Rental Properties and Royalties (Sch E)). Under the Regular Tax section, Operating Losses for each year from 2018 to 2022 are prepopulated and editable, but all amounts are zero except for 2021. 2023 is left blank, where I should be entering an amount. Below that is an uneditable total amount that also agrees with the amount I referred to in step 1 above. Note: there's no line on this screen for Before 2018.

Does this mean I should simply put zero for my 2023 operating loss? Presumably I have no additional amount I can allocate to 2023 since the total amount has already been allocated. Part of the reason I'm really struggling with this is because I'm not able to trace how Turbotax calculated the amounts on the lines for Before 2018 and 2021. There's no number in my 2021 tax pdf file (including all calculation worksheets) that ties to the amount that Turbotax has prepopulated in to the Carryovers to 2024 Smart Worksheet line for 2021 Operating Loss.

[PatriciaV · Accepted solution]

If you are unable to find losses on prior year returns, it's possible you had nothing to carryover to this year. That may explain the blank boxes on Schedule E Losses by Year. In this case, entering a zero may resolve the SmartCheck error message.

[Flixbix]

Did you ever find an answer? This is driving me bananas!

[KrisD15]

To clarify, have you ever reported using Section 179 deduction for your rental property? 

Section 179 is usually not usable for a rental, although people have over-ridden and taken Section 179 on their Schedule E. Sometimes the loss is not used that year and carries forward  The following year there is an "unclaimed loss" but, at the same time, it is also an "Unallowed Loss" 

[Flixbix]

I entered in 0 and went about my business. Hope that's the right thing to do!

[TahoeRick]

I have been using Turbo tax for many years, this exact problem has come up for me 3-2025 for year 2024 tax year. This has always carried over. Operating loss for 2023 is blank on the work sheet and I received this same error on the review as stated above by others.

I had a loss, I for one will not be putting a zero. More research as to why this occurred this year is needed.

It should have been carried over, not me doing the work for this program I buy each year in my opinion.

This process is not new for me, so a change has happened on turbo tax. 

[KrisD15]

The program does seem to be updated for tax year 2024.

Section 179 deduction has never been allowed for passive income and perhaps the program has been updated to account for this. 

Other unused Passive loss not allowed the previous year can be carried over, that is done in the Rental and Royalties section on the "Property Profile" screen.

@TahoeRick

[MG26]

My online property screen doesn't look like this and doesn't have the last option of carryovers. See attached. Are you on Desktop?

[canes52]

Has this issue been fixed? I'm still getting the same error described in post. I've dealt with at least 6 turbotax "experts" and the typical responses are start over (already attempted) or put 0.  @turbotax needs to address this issue and provide a solution!

[taxfilerforfamily]

I would suggest that you comment about your problem in the thread I created and call technical support - TurboTax is completely unaware of this issue.  The OP of this thread has "agreed to enter "0", so the MODs may not be looking at this thread anymore.

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/disallowed-passive-lo...

[PatriciaV]

The workaround for this experience is to remove/delete the amount from the QBI column on the Carryovers to 2024 Smart Worksheet that appears with the Smart Check message. This edit will allow the worksheet to pass final review so you can file your federal return.

The amount of that carryforward is also recorded in the continuation of that table on the line for the year that generated the carryover (found on the Schedule E worksheet for this property). In future years, this carryover loss may be applied as allowed.

While TurboTax normally transfers carryovers from last year to your current return, it's possible this function wasn't successful for you this year.

Note that the "Special Situations" questions shown previously is part of the interview when adding or editing a rental property. In TurboTax Online, this is found under "Less Common Situations" on the rental property summary page.

@MG26 

@canes52 

[MG26]

to Taxfilerforfamily,

When you get "Enter info about passive losses" error, it allows you to scroll through all of the worksheet. You may notice that the 2023 amount is put into 2022 in error. I've also noticed an amount in 'before 2018' and was able to clear that field by putting in a value and then blanking it out. But the rest was still wrong. I suppose you can put a zero and it may let you continue but I wouldn't file that way if any values in the worksheet are incorrect.

I had to download the desktop version and do over. It did import my 2023 data. While in work it allowed me to correct the values on the worksheet but you can also go to forms mode and go to form 8582 to correct the values.

I know it's a pain but I'm so happy this misery is over with.  Here's some instruction I copied from another post.

If you started your 2024 return in TurboTax Online and want to switch to TurboTax Desktop, here's how.
1. Install and/or open your 2024 TurboTax Desktop.
If you have not purchased TurboTax Desktop software, select the product you need to complete your return.
Important: If your return includes a state, make sure you also install the corresponding state program(s) in order to proceed.
2. Select Continue From TurboTax Online.
3. Sign in to your Intuit Account. (use same login info)
4. Your data will be imported into TurboTax Desktop, and your return will open once data transfer is complete.

[penke94]

Were you able to find a fix for this? I've been wracking my brain and searching everywhere for a solution to this same problem. Not sure if this is/was on yours as well, but mine is showing a disallowed passive loss in the Before 2018 box with the amount that was my loss in 2022; first column in 2022 shows the 2023 loss. It doesn't make sense to enter the same number into the 2023 box, and doing this then changes the amount in the Before 2018 one, so I'm not sure if that becomes an issue. Prior to this year there was never anything in the Before 2018 box.

Hoping you were able to get it resolved and pass along the how.

[MG26]

Had to download desktop version. Sign on same ID. Select continue from online. It downloads 2023 data and have to start over 2024. I did screen prints from online to help.  While I was working,  the form popped up to allow me to fix it. If not, you will go to forms mode. Clear out and enter data to where you think correct. Sign up for free audit guard. 

[taxfilerforfamily]

I'm not sure of the posting rules here, but this is what I did:

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/re-disallowed-passive...

@penke94