topic Turbotax is deducting all of my Schedule E losses, even though it exceeds the $25K threshold - why? in Investors & landlords

Turbotax is deducting all of my Schedule E losses, even though it exceeds the $25K threshold - why?

autumn11 — Thu, 26 Feb 2026 01:27:37 GMT

Hi there, I've been using Turbotax for years and was surprised when it calculated a huge refund for me. When I look why, it is because it is deducting my full Schedule E loss, which far exceeds the $25K threshold - it was a rough year. I'm not a real estate professional and said no to that question, but am actively involved in the management (and checked that box) in managing my real estate portfolio. I have it marked as a real estate enterprise (ten properties) as I always have. Did the rules change this year and it treats a real estate enterprise similar to a Schedule C business, or have I been shortchanging myself in prior years by not deducting the losses? I'm not sure why it is coming up different this year.

Re: Turbotax is deducting all of my Schedule E losses, even though it exceeds the $25K threshold - why?

taxmodern — Thu, 26 Feb 2026 19:01:04 GMT

There hasn't been a change regarding this, so the same rules still apply. You mentioned that you have other rental properties. Maybe what you're seeing is the losses from that one rental property are offsetting the gains from the other rental properties? Losses and gains from rental properties can offset losses and gains from other rental properties you own.

Re: Turbotax is deducting all of my Schedule E losses, even though it exceeds the $25K threshold ...

DavidD66 — Mon, 02 Mar 2026 00:07:25 GMT

Designating a property or properties as a real estate enterprise does not affect whether or not losses are realized or suspended. Rather it is a safe harbor for QBI purposes. As mentioned above, since you have ten properties, you may have net income from the others that is being used to offset the loss. In addition, if may have sold a property that resulted in allowing suspended losses. I suggest you review your Form 8582 (Passive Activity Loss Limitations). Activity on that form should explain what it transpiring with your real estate loss.