rental property
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aslerman21
Level 1

rental property

I am using TurboTax premier for the first time this year. I did taxes manually before. I have condo that I rent for many years. I have income and expenses that I show in schedule E, and with depreciation of the property I have loss that on form 8582 allow me to deduct it from total income on 1040. Why TurboTax did not put loss number in form 8582 part 1 (1b) and did not do calculation in part11(special allowance.....). It put my loss on 3b line and 4 line, and says 0 deduction allow. I marked myself as active participant, I am under $150000 and should be allowed to deduct up to $25000 (my loss about $10000). Thank you for your help.

4 Replies
ColeenD3
Employee Tax Expert

rental property

The cut off starts a $100,000 and ends at $150,000.

 

Maximum special allowance.   The maximum special allowance is:

  • $25,000 for single individuals and married individuals filing a joint return for the tax year,
  • $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and
  • $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified.

  If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI.

 

Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance.

 

Form 8582 losses are not realized until the complete disposal of the property.

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aslerman21
Level 1

rental property

I wasn't clear about my MAGI, my MAGI is less than $100,000 (joint return) and that is why I was expecting to see my loss being deducted but the program did not do it. That was my question. Where should I look and re-check my entries, what forms, what lines? Thank you.

ColeenD3
Employee Tax Expert

rental property

Start off with the set up of the rental. Edit each section to make sure you didn't accidentally disqualify it. If all else fails, delete the Schedule E and redo it.

 

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aslerman21
Level 1

rental property

I found the answer. In schedule E  (wks) the line 'active participation' was not checked. I think it is a mistake that this program do not ask the question 'Are you active participant ?' and put a mark on needed form. H&R does.

Thank you for your time and help.

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