What to do with carryovers to 2022

[jyeh74]

I am looking at a paper copy of 2021 taxes.  I am looking to translate some numbers into TT 2022.  Under a General Information worksheet, it summarizes carryovers to 2022.

Underpayment Penalty

Federal = $150

Federal Carryovers

Unallowed Passive Losses = $1000

AMT Unallowed Passive Losses = $1000

California Carryovers

Unallowed Passive Losses = $1000

AMT Unallowed Passive Losses = $1000

I am not sure what these are but since it says "unallowed" and they are all the same number for federal and state, I'm guessing they cannot be carried over?  What is the underpayment penalty of $150?

[CatinaT1]

It's hard to tell from the information you provided. 

If you prepared your return in TurboTax last year, any amount that needs to carryover will automatically happen. You do not need to enter anything for it to carryover.

I'm not sure why you would see an underpayment penalty listed under as carryover. We would need more information to give you any helpful information.

[jyeh74]

I do not have a TT 2021 to import into TT 2022.  Only have paper copy from different company.  So trying to manually understand what to enter into TT 2022 software.

[JohnB5677]

Please clarify a couple of things.

• Did you get any of these forms in 2021?
  • K-1
  • 1099-DIV
  • 1099-INT
  • Do you have rental property or get Royalties?
  • Did you have a Schedule E in 2021?

Passive loss carryovers happen when you weren't able to fully deduct passive losses on your previous tax returns due to passive loss limitations. If you couldn't deduct all of your losses on previous returns, you can enter the amount of your carryover to include it on your current year return.

[jyeh74]

Yes schedule E for rental 

[JohnB5677]

That is where you will post the Passive Carryover Loss.

You must set up the details for your rental under:

• Wages & Income
• Scroll down to Rentals, Royalties and Farms.
• Select Rental Properties and Royalties (Sch E)
• Continue the interview until you get to Here's (your) rental property info.
• At the bottom of the screen Carryovers, limitations, at risk info, etc.

You can enter your carryover passive loss here.

[jyeh74]

@JohnB5677 But since the $1000 says Unallowed Passive Losses and also for AMT Unallowed Passive Losses for both state and federal, does that mean I cannot put $1000 for carryover losses?

I don’t even know the difference between the Unallowed and the AMT Unallowed.  What’s the difference? 

[ShirlynW]

Unallowed Passive Loss is the amount of a loss from your rental (passive) activity that you were not allowed to deduct in the current year of the actual loss that must be carried forward until those losses are allowed.

The AMT is an "alternative" tax which TurboTax calculates behind-the-scenes, along with your regular federal tax. If the alternate method results in a higher tax than the regular method, you pay the difference on top of your regular tax. The AMT Unhallowed Passive Loss is the amount of loss from your rental activity that is not added back for the calculation of the AMT.

[jyeh74]

@ShirlynW Other than things like depreciation and operational costs from repairs and mgmt fees, I don’t know what would cause an unallowed $1000 to be carried forward?  And ironically both the federal carryovers for Unallowed passive losses and AMT Unallowed passive losses and the state carryovers for Unallowed passive loss and AMT Unallowed passive losses, all 4 figures are the same $1000.  Is that coincidence?  

I am under Business Income and Expenses section.  I only see 

Property profile I check carryovers “I have passive activity real estate losses carried over from a prior year”

There are 3 sections

Regular Tax Carryovers

Sch E

AMT Carryovers

Sch E

QBI Carryovers

Sch E

 @JohnB5677 And how will I know out of the $1000, what is attributed to rental property 1 or rental property 2 or rental property 3 etc? 

Where do I find the AMT Unallowed Passive Losses?

[RobertB4444]

The $1000 loss is not coincidence - all four numbers are referring to the same loss.

You are limited to how much you can deduct from the losses on a rental property.  In 2021 (or in an earlier year) you lost money on your rental house.  You deducted the loss but you had actually lost $1000 more than you deducted on your tax return.  

So that $1000 just floats forward with you, from year to year, until you make some money on the rental and then you get to deduct the loss.  Or until you sell the house.  Whichever comes first.

AMT stands for "Alternative Minimum Tax".  It is designed to prevent people who have a ton of deductions from avoiding taxes altogether.  So the AMT loss that you are showing is only useful to the system if you were to trigger this alternative tax by having too many deductions.

The first two - regular tax carryovers and AMT carryovers - both get that $1000 we've been talking about.  It's the same number but enter it in both places.  

The QBI number stays as zero unless you are a real estate professional or dedicate at least 250 hours a year to rental property activities in which case the $1000 goes in the QBI section too.

@jyeh74