In prior yr I had passive activity real estate loss. It was on 1040 as deduction but WHERE can I see if loss was USED or was a carryover loss to current yr? No 8582.

[jng007]

In prior yr I had passive activity operating real estate loss. It was on 1040 as deduction, pre AGI. But Taxable inc was 0 due to itemizations, etc. So I don't think loss was actually USED in prior yr, but not sure. WHERE can I see if loss was USED or just appears on 1040 but NOT used & is a carryover loss to current yr? TT generated no form 8582 in prior yr.

[TaxGuyBill]

If no form 8582 was generated, your Passive Loss was fully used.

However, it sounds like using that loss could have created a Net Operating Loss (NOL).  If Line 41 of your Form 1040 was negative, it is POSSIBLE that you have a Net Operating Loss.

Unfortunately, TurboTax isn't very helpful with NOLs.  You usually need to figure things out manually, or go to a tax professional.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p536.pdf">https://www.irs.gov/pub/irs-pdf/p536.pdf</a>

[jng007]

Not convinced that's right.  In the "comments" to another question in this forum, multiple users said TT does NOT generate the 8582, rather posts the loss into the worksheets where it sits. So you have to enter the amount into TT in the "Passive Losses for Prior Years" page before it will generate an 8582.  In other words, sounds like you have to determine on your own if a loss is carried forward (same as you mentioned for an NOL).

The only way I can think of determining if the passive loss was used is to run TT on an "as-if basis" by deleting the passive loss and its details from TT to see if it generates taxable inc and tax expense at the same amounts WITHOUT the passive loss. But, I was hoping there's a more obvious way.  (BTW, so you can see the Community query I'm referring to, it is under "passive real estate losses-- what is it and how do I know if I have carryover from last year.")

[TaxGuyBill]

There WILL be Form 8582 if you are reporting that Passive Activity and can't use the losses in that year.

As you pointed out, if you don't still have the Passive Activity (such as converting a rental property to your personal use), future years will incorrectly not keep the Form 8582.  But the 8582 will still exist in any years there are unused Passive Losses while you are reporting that activity.

If it showed up on the 1040 as a deduction and no 8582 was produced during the year of the loss, all of the losses were used.

You then need to determine if an NOL exists.  If an NOL does exist and you did not make the election to 'waive the carryback', you would need to amend the tax return two years before the loss to claim the NOL.

[jng007]

ADDITIONAL INFORMATION: I just noted in the TT worksheets the "Federal Carryover Worksheet" and it only has line items for Capital losses and NOLs and a couple of rarer investment items. But, there is NO place for a passive investment loss (ordinary income loss) to even be posted as a carryover.  Are you all seeing the same gap I'm seeing?  Seems like TT should at least put the line item on the template to recognize they can exist.

[TaxGuyBill]

You enter prior year Passive Losses on the Schedule E worksheet.  The 8582 will show all unused Passive Losses to be carried to the next year.