TurboTax automatically entering last year's unallowed rental loss as this year's net operating loss?

[writergal]

I'm using TurboTax Family and Home 2024. I had an unallowed rental income loss (passive income loss) from last year that I couldn't take because my income was too high.

This year, my income is below the threshold, so I can take the passive rental income loss (as calculated by form 8582), but for some reason TurboTax is putting last year's unallowed rental loss on this year's net operating loss (Schedule 1, Line 8a).  The program states, "Here is your allowed net operating loss (NOL) carryover you previously entered from your 2022 return."

This is incorrect, because that is not a net operating loss. It was a passive income loss, subject to the calculations of form 8582 and is included on Schedule 1 Line 5 (Rental real estate, royalties, partnerships, S corporations, trusts, etc.) But I cannot figure out how to override this in the program, since it is automatically entered.

How can I remove this amount from the Net Operating Loss line?

[KrisD15 · Accepted solution]

I think you mean you are using TurboTax Home & Business.

TO DELETE THE NOL

Select the Business tax and scroll down to 

Less Common Business Situations

Scroll down in the section to 

Net Operating Loss/QBI carryforward Loss    START or UPDATE

Clear out any numbers, replace with 0 

OR

For Desktop, Switch to FORMS (top right)  

Scroll down to    Carryover Wks    and delete 

TO ENTER THE PASSIVE LOSS CARRIED OVER

Go to the Rental Section

If the rental is still active, select EDIT for that rental 

Select "Property Profile"    

Third screen in asks about Carryovers, Select "I have passive activity real estate losses carried over from a prior year" and CONTINUE

Enter the amount on the following screen. If you have not been subject to AMT, enter the same in both boxes or adjust for the AMT amount if applicable

If the rental is no longer active,  

Go through the rental section to get to that same screen. 

Enter the property the loss was taken on for the profile to get to that screen 

Select only the answer to enter the loss carryover

Select NO it was not rented all year  Enter zero days rented zero days used for personal use

DO NOT ENTER INCOME NOR EXPENSES

The loss will be listed on Schedule 1 line 5

[writergal]

Yes, I meant Home and Business. Thanks so much for this!