Reduce income by itemized deduction before I apply my real estate losses

[wrangler18]

Once I determine my income for the year (Interest, Dividends), I add my real estate losses to it.  This gets me to a negative number.   This leaves my itemized deduction as a useless asset.

So for example :

Interest and Dividends: 10,000

Real Estate gains (losses): -35,000

Adjusted gross income = -25,000.

Now my itemized deduction of 45,000 is useless to me.  Part of that 45,000 is deductible points paid on my loan to acquire my investment property. 

1. How can I make use of that itemized deduction or am I out of luck?
2. How can I move those points paid elsewhere so I can use it to increase my real estate losses?That's if I'm allowed to do so.
3. Where can I find my real estate losses (25,000) carried forward to the next year?

Thanks!!!

[Critter]

1) How can I make use of that itemized deduction or am I out of luck?  If you cannot use the itemized deductions then they are simply wasted ... default to the standard deduction instead.  Only charitable deductions can be carried forward.

2) How can I move those points paid elsewhere so I can use it to increase my real estate losses?That's if I'm allowed to do so.  If the points are on the mortgage for the rental then they can be entered on the Sch E by amortizing them over the life of the loan. 

3) Where can I find my real estate losses (25,000) carried forward to the next year?  Look at the form 8582 and it's worksheets ...  https://www.nolo.com/legal-encyclopedia/can-you-deduct-your-rental-losses.html

[Carl]

First, understand that rental income and expenses are passive. Your passive rental losses can only be used to reduce your taxable passive rental income. That's it. Nothing else.

1. How can I make use of that itemized deduction or am I out of luck?

You're out of luck.

1. How can I move those points paid elsewhere so I can use it to increase my real estate losses?That's if I'm allowed to do so.

You can't move the points elsewhere. Period. Also, contrary to popular belief, points are not added to your cost basis. Points are amortized (not capitalized) and deducted over time (not depreciated over time).  To enter your points *correctly* in TurboTax do the following:

In the Assets/Depreciation section select to Add an Asset.

Select Intangibles, Other Property and continue.

Select Amortizable Intangibles and continue.

You can describe it any way you want, such as "Mortgage Points". The cost is the total of the points your reporting/claiming, and the date is the closing date of your purchase or refi. Enter that data and continue.

Select Purchased New, and Used 100% for Business, the closing date of your purchase/refi (or the date property placed in service - whichever is later) and continue.

Select the Code Section 163: Loan Fees and continue.

Useful Life in Years is either 15 years or the life of the loan - whichever is greater. Then continue.

Now you're on the summary screen where you can "see details" of how much will be deducted (not depreciated) each year. Click continue, and you're done with this particular item.

1. Where can I find my real estate losses (25,000) carried forward to the next year?

They'll be shown on the IRS Form 8582.

[wrangler18]

"In the Assets/Depreciation section select to Add an Asset."

I cannot find the Assets/Depreciation section.  Been looking and googling for a while.  Can you direct me to it?  Or is there a certain version of turbo tax required?

[Critter]

In the rental section you should see the assets after the expenses ... since you must be using the downloaded version  you can upgrade to Home & Business but it is not needed.