Why cant i deduct loss from Rental income in the Royalty section that has a netloss?

[yekasi]

Hello,

i have a few rental properties and i have been taking depreciation on the last few years. i have been using turbotax for the last 3 years. This year when after i entered all of the rental income / expenses / depreciation, there is a netloss on the property, but it says "What you can deduct at this point: zero".

I checked the 2022 trubo tax and i can see that it did show that I can deduct the same amount as the netloss.

This year, none of them is allowing me to and all showing "zero".

Some rental properties are owned by a single person LLC, and some of them is a direct name ownership and they all showing a zero on deduction. 

Eventho it says you can deduct is zero - it did sum up all the "netloss" across all the rental properties & roytalties section, and display a net -26669 in the Business Income and Expenses.

What is the reason why that it says i cannot take any deduction, but still showing a -26669 in the Sche E?

Later on a few screens later - it says i am getting a QBI of $5999.  I do not understand where this $5999 come from.  And this $5999 appears to the be total deduction i can get and not the -26669.  Can you help clarify this for me?

[Mike9241]

is your adjusted gross income (line 11) is over $150,000. Then you are subject to the passive activity loss limitation for real estate. generally, rental real estate is a passive activity under IRC 469. the tax laws provide that if your adjusted gross income is over $150,000 before passive losses are taken into account passive losses are only allowed to the extent of passive income so in the end there is no current year deduction. look at form 8582 

This law has been on the books for years so there should have been the same result in prior years.

if it is under up to $25,000 in losses should've been allowed with active participation

[yekasi]

Thanks. I  have just looked.  Yes my AGI is over $150k (line11).  and it has been over 150k for as long as i own these properties.

I also just looked at 8582 and it shows "Prior years of unallowed losses" is   -$176k !!!!! That is a negative 176k.

So did i remember wrong? All these years the deduction was not taken into account? 

It also shows i have a QBI deduction of $5999.  Where is this 5999 from?

Thanks

[DianeW777]

You are correct.  The accumulated passive activity losses (PALs) will be carried over until the year you sell the property or used a small amount at a time up to the net income after current year deductions if applicable in any year  In the year of disposition/sale you will be allowed to deduct the full amount of all combined losses that are carried over from your rental activity or activities.

If you have only rental income, then the QBI deduction is also from this activity.  If you have self employment income then it could be coming from that. You will see this information on Form 8995 in your return currently and in prior years.

@yekasi