Last year, I did a 1031 exchange on a relinquished property that had significant passive activity losses. How can I make losses roll forward to my replacement property?

[stevenmichaelmar]

When I removed the relinquished property from my Schedule E, the passive activity loss limitation schedules no longer show the PAL and I can't figure out how to assign the PAL to the replacement property in Turbotax...where do I enter it?

[tagteam · Accepted solution]

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@stevenmichaelmar wrote:
..where do I enter it?

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There is a screen in the Property Profile section (Rentals) where you can enter PAL carryovers after checking the appropriate box.

[split]

When you click the box for carryover passive losses,  TT asks for three Passive Losses amounts from Previous years Schedule E:

1. Regular Tax Carryovers

2. AMT Carryovers

3. QBI Carryover.

I believe #1 is line 21 of schedule E.

I see no corresponding amount for #2 or #3 on schedule E

[AmyC]

Schedule E line 21 is just a subtraction line.

You will want a copy of last year's return including all worksheets.

You want the Carryforward worksheet to 2020 for your answers.

Look for Sch E Passive Loss carryover and all the amounts you need are there.

@split

[split]

@AmyC 

Perfect, Thank you

[Sz]

Hello,

I had the same scenario, the only difference is I sold another rental property with gain and this property is not in 1031 exchange, as per reg we need to carry over relinquished properties PAL loss to replacement property. But when I input gain information it absorbed all the PAL loss. I used Proseries professional.

Would you please help me?

[tagteam]

You might want to post in that forum.

ProSeries Tax Support (intuit.com)

[spnb]

I am still confused. I know where to see the passive on the relinquished property, but where do I see how is the passive loss recorded for the new 1031 replacement property?

In my case, I relinquished one and replaced it with two properties. Would I see the PAL divided between the two new properties somewhere on the form?