Confusion with Entry of Passive Losses for Rental Property

[DX-hound]

Perhaps a TurboTax expert can help me with this.

We have a rental property (single family home) and are using TurboTax Premier. We're carrying some prior year passive activity losses.

When entering our data, TurboTax pops up a page titled "Enter info about passive losses."  The page says:

"When QBI losses are present, IRS regulations require they be used in a first-in-first out order going year by year. We need to know how much of your loss comes from each year. Enter 0 for years with no losses."

Then the page lists 2018 through 2024 with entries for losses. The correct total passive carryover loss appears at the bottom.  But then there's another set of yearly entries running from 2019 through 2024 below the first set of years.

Not being real estate professionals (but we are Active Participants), we can't deduct rental losses immediately but can carry the passive losses forward. So what do we enter on this TurboTax page, is it Line 26 of From E, the total rental real estate and royalty income or (loss), which is always zero since we can't take the deduction in-year, or do we enter Line 21, the passive activity loss, which is also reported on Form 8582?  And what goes in the second set of years towards the bottom of the form. That set also shows a total but it's not the total passive loss carryover but just the loss in 2024. Very confusing.

Regardless of what we enter, our computed federal tax and refund amounts do not change.  

Thanks

[ThomasM125]

You would enter the passive losses for each year.

I believe you are on the screen that says Enter info about passive losses. The first cluster of data is for your regular losses and the bottom cluster is for QBI losses. You may have had years where your loss was not from qualified business income so that is why you have the two sets of data, though they would likely be the same.

You need to enter the losses by year that make up the total listed on the bottom of the column. If the total at the bottom of the second cluster of data only lists the loss sustained in 2024 but it should include losses from previous years, then your loss carryovers may not be reflected properly in TurboTax. You should see an opportunity to adjust that on the previous screen where is says Passive Losses from prior years. That is where the numbers in the worksheet come from. You can enter on that screen your correct loss carryover amount to the current year, both for regular loss purposes as well as QBI loss purposes.

[heffnerphjk]

bottom line, I decided to delete the rental income and start it over.  This time I stayed away from carryover losses altogether.  Done.