What is passive loss carryover

[hongcamai]

If I understand you correctly, you're saing the passive loss continues to be automatically carried over until you use up the entire amount by Turbo Tax, if we used Turbo tax a the year of the loss?

I am trying to see if I had one and was confused about here to check. 

[Jim202010]

@DavidS127  I am moving to TurboTax for the first time from my 2018 tax preparer's version printout.

I have a Schedule K-1 activity with a passive loss carryover from 2018 for 2019.

But I'm confused about whether to use the:

• "Schedule K-1 At-Risk Limitation Allocation Worksheet" associated with the K-1 which has a A line 1 entry for "Carryover Prior Year Loss"
• or "Form 8582 p2 Worksheet 3 line 3c" which has "Prior years Unallowed Loss"

If I put it on both places, it gets double counted.

Which is the preferred place?

[Carl]

But I'm confused about whether to use the:

It goes on the K-1 worksheet, since all the data from the K-1 ends up on page 2 of your 1040 SCH E.

[Jim202010]

Thank you.

[hongcamai]

If Turbo tax will automatically carry the passive loss over if you used Turbo tax the year before, why does still ask if we have passive loss? I am confused and not sure what to answer here.

How do i know I had one from last year? I see a loss in Schedule E, but was it a carry over amount or it was deducted in that year already? What do I look for in what form?

[mayxie]

Should the carryover loss also show on schedule c?

[RobertB4444]

@mayxie  No.  Schedule C is only for active income.  Passive losses would only offset that income by being allowed deductions on your 1040.

[mayxie]

thank you. I wonder if the rental property carryover losses are at risk Carryover? It is my first time using TurboTax. It is pretty much a plain vanilla kind of investment property. I collect rent and pay mortgage and the tax and repair. (I realized the results are quite different using at risk or not at risk. ). Thank you!

[mayxie]

So only in 8592?

[MarilynG]

Most rental properties would be considered 'at risk' investments.

Per Expert @VictoriaD75:

"A passive carryover loss will show on your prior year return. These losses are created from any passive activity found on Schedule E, such as rental income. They will appear on your Schedule E Worksheets - Carryforward, which is a TurboTax worksheet and not an IRS form.

You can also find details regarding passive carryover losses on Form 8582, on page 2, Worksheet 5. If you used TurboTax in the prior tax year, these carryover losses will automatically transfer in. If not, use your tax documents from the prior year to make sure they are entered for the current tax year.

Do you happen to also use the rental for personal purposes, as well?

If the residence is rented for 15 days or more and is used for personal purposes for more than 14 days or 10 percent of the days rented, whichever is greater, allocable rental expenses are allowed only to the extent of rental income. Allocable rental expenses are deducted in three separate steps:

1. The interest and taxes are deducted
2. Utilities and maintenance expenses are deducted
3. Depreciation expense is deducted

For utilities, maintenance, and depreciation expenses to be deductible, there must be positive income following the deduction of items in the preceding steps. In addition, the expenses, other than interest and taxes, are only deductible to the extent of that positive income.

Expenses are allocated between the rental and personal days before the limits are applied. The IRS requires that the allocation be on the basis of the total days of rental use or personal use divided by the total days of use."