Enter sale of rental property - software issues

[Tax2019Pay]

Software issue explained...

[DaveF1006]

To clarify, did you report a K1 into your return?

[Tax2019Pay]

Hi DaveF1006:

I figured out the issue.  The TurboTax matched the gain from the sale of rental property in 2022 to the carry-forward passive losses accumulated from K-1's.

Here is what the IRS said:"https://www.irs.gov/taxtopics/tc425."

Here is another source: https://finance.zacks.com/sale-rental-property-considered-passive-income-8995.html

This is exactly what the TurboTax did.   I learned something.

Thanks.

[DaveF1006]

It depends. To clarify, what kind of a K-1 is it? Is it from a partnership, S-corp, or trust? What line in the K-1 does the negative number appear?

[ThomasM125]

I think what you are describing is a schedule Q entry from a Real Estate Mortgage Investment Conduit (REMIC). It is a form you would receive when you are a member of a real estate investment group. Can you clarify if you entered such a form? You can recognize rental loss carryovers in the year you sell the properties that created them.