How many rentals properties can I enter?

[DoninGA]

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@alshaver wrote:

how is this an irs limit? 

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It is the IRS limit when using personal tax preparation software.  There is no limit when using professional tax preparation software.

[Carl]

You may have the option to aggregate properties together and treat that group as a single entity. Basically, you could make Group A for three rental properties. Each  property would be listed separately in the assets section for that group. The only downside is that you can't realize all of your losses until you sell or dispose of all the properties in that group. This and more is covered in IRC Section 469(c)(7)(A)

I've ran across of few in these forums over the years who do this because they have more than the 45 properties the program can handle individually.

https://www.law.cornell.edu/uscode/text/26/469

[Anonymous_]

Just for the record, Section 469(c)(7) allows a taxpayer to treat all interests in rental real estate as one activity only if the taxpayer is a real estate professional (which is delineated in Section 469(c)(7)(B)).

[Carl]

Thanks tagteam. I would hope that with 51 rental properties, they'd have no issues with qualifying as a real estate pro. But then, you never know!

[Anonymous_]

Absolutely, we would all probably think that would be the case, but there are a lot of people out there (I know a couple of them, actually) who own multiple properties and leave all of them to a property manager (or a management firm). As a result, they do not even come close to qualifying as real estate professionals.

[ranchoninja]

Hi there @alshaver is it indeed true that turbotax now allows for more than 45 properties?  If so I will buy it for my 2021 taxes.  Thank you for your kind help.

[DoninGA]

@ranchoninja The TurboTax 2021 desktop editions only support 45 individual rental properties.  Three properties per Schedule E and 15 total Schedule E's.

[alshaver]

it didnt allow it this year.  when did they change this?

[Critter-3]

This has been an IRS limitation since efiling started 30 years ago. 

[ranchoninja]

@Critter-3  do you have a link that supports this, that its an IRS limitation.  I do recall my accountant was able to e-file (I can confirm with them) - I had 47 last year and around 50 this year.  I was told H&R Block allows more than 45, even if we have to print and mail, at least we are able to get the job done.

[VolvoGirl]

There is a max of 45 rentals you can efile.  Which is 15 schedule E x 3.

I found an old answer that has ways to enter more into the Desktop versions.....

If TurboTax only allows 45 houses, I see 4 options:

(1)   Make the election to “group” some houses into one asset.  HOWEVER, that can be problematic when you sell the houses.  I would not advise that option unless you consult with a tax professional about it.

(2)   Fill out the last 5 houses manually on Schedule Es, and override Line 17 on the 1040 to reflect the ‘extra’ forms that you manually did.  HOWEVER, overriding in TurboTax voids their guarantee, and you would NEED to make sure the other numbers on the form adjust  appropriately from the override.  http://www.irs.gov/pub/irs-pdf/f1040se.pdf

(3)   Use professional software.  HOWEVER, you need to be very familiar with how a tax return works.  Professional software does not give you step-by-step questions.  You need to know what to enter and where.  https://accountants.intuit.com/tax/proseries/professional/ppr.jsp

(4)   Go to a tax professional.  I suspect that is what you may have done in previous years.  With 50 rental houses, I would suspect it is  quite expensive to hire a professional.

As a side note, except for option #1, you will not be ableto e-file.  The IRS has an e-file limit of 15 Schedule Es (3 houses per Schedule E).  You would need to file by paper and mail it.

[Critter-3]

https://support.ultimatetax.com/hc/en-us/articles/360009723374-Schedule-E-Limit

[Critter-3]

This may be a limitation on DIY programs only ... most folks with that many rentals either have them in a corporation and/or use a professional to file the returns.   DIY programs cater to the 90% of the taxpayers with uncomplicated returns and not to the %10 which have more complicated returns. 

[Carl]

One thing you can do as mentioned earlier in this thread, is elect to aggregate 2 or more rental properties into a single activity. There's pros and cons to that and I highly suggest you "do your homework" before doing this, so you understand not just the benefit, but more importantly the potential consequences of aggregation.

While the program does not "directly" support aggregation, it can certainly be done manually in a way that allows you to still e-file. (i.e.; no overrides required.)  But you must understand that once you aggregate two or more properties into a single activity, you can't change your mind or "go back" in a future year.

One of the potential downfalls of aggregation is that you can't "realize" any losses on the aggregated activity, until the tax year you have sold all (or the last) properties/assets of that aggregated activity.