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markcarolbaird
New Member

Why didn't previous years' unallowed passive activity losses w/sale of rental property, carry forward into 2020 calcs? (TT did auto when sold diff rental in 2015).

 
2 Replies
ColeenD3
Expert Alumni

Why didn't previous years' unallowed passive activity losses w/sale of rental property, carry forward into 2020 calcs? (TT did auto when sold diff rental in 2015).

Sometimes this happens. You can look at your Form 8582.

 

You can deduct prior passive losses that were not allowed when you sell the property that generated them.

TurboTax will calculate this transaction for you.

Tip: If your rental property is located out-of-state, make sure you first set up that state properly in Personal Info. That way, when you do your state taxes, we'll be ready to go.

Go into your TurboTax return. Not sure you're in there? Click on the orange Take me to my return button.

1.       Search for rentals and then click the "Jump to" link in the search result.

2.       Answer Yes to the question Did you have any rental or royalty income and expenses?

3.       Follow the on-screen instructions as you proceed through the rental and royalties section.

o    We'll first ask you to enter general information about your rental (description, address, ownership percentage, etc.) 

o    Eventually, you'll come to the Rental Summary screen which is where you enter your:

·         Rental income

·         Rental expenses

·         Capital assets and depreciation

·         Vehicle expenses

When you get to the screen "Do any of these situations apply to this property?", you can  make the selection that applies to your situation by marking those that apply from the list available.

Check "I have passive activity real estate losses from a prior year." then continue and on next screen, enter the carryover and follow prompts from there.

 

If you are in the online version, scroll down to the bottom of the rental section and enter it under:

 

LESS COMMON SITUATIONS

 

Carryovers, limitations, at risk info, etc.

 

 

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Carl
Level 15

Why didn't previous years' unallowed passive activity losses w/sale of rental property, carry forward into 2020 calcs? (TT did auto when sold diff rental in 2015).

It's perfectly possible you have no carry over losses too. With the change in tax law in 2018, if you were actively involved in the rental activity, then up to $25K of excess losses on rental activity is deductible from other ordinary income. So if you had less than $50K of carry over losses in 2018, they most likely were deductible from other income on the 2018 and 2019 tax return. If there was no 8582 generated on the 2019 return showing carry over losses, then they were all used up on the 2019 tax return at the latest.

 

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