I entered my losses from Schedule K-1 but they are...
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New Member

I entered my losses from Schedule K-1 but they are not reflecting on my personal tax forms. Getting access to a person to talk for 10 mins is becoming a tooth extraction

i need to speak so someone for a quick 5 mins
3 Replies
Anonymous
Not applicable

I entered my losses from Schedule K-1 but they are not reflecting on my personal tax forms. Getting access to a person to talk for 10 mins is becoming a tooth extraction

many types of losses are passive and thus are not allowed unless you have passive income.  if the K-1 is from a publicly traded partnership (PTP) box on k-1 will be checked and you need to check it in TT worksheet, the special tax rules for it do not allow passive losses (lines 1 2 an3) even if you have other passive income.  

if it's not a PTP look at form 8582 to see why the passive losses are not being allowed. 

New Member

I entered my losses from Schedule K-1 but they are not reflecting on my personal tax forms. Getting access to a person to talk for 10 mins is becoming a tooth extraction

Sorry i am not sure i understand. The LLC sent me a K-1 and i am trying to add that K-1 to my personal taxes. The K-1 i got has losses. Can i not deduct those losses?

Anonymous
Not applicable

I entered my losses from Schedule K-1 but they are not reflecting on my personal tax forms. Getting access to a person to talk for 10 mins is becoming a tooth extraction

by law losses on line 2 (real estate net income) are passive in order for them to be allowed you need passive income or if you actively participate there is a special allowance if your adjusted gross income is below $150,000 before taking into a/c line 2 amounts.  

if the loss is on line 1of the k-1 did you materially participate in the activities of the LLC? if no the loss is passive. see form 8582. if yes, the materially participated box just below line1 needs to be checked 

 

According to the IRS, a trade or business is considered a passive activity unless the taxpayer materially participates.

You can claim to have materially participated in the operation of a trade or business activity by meeting one of seven following tests:
1. You work 500 hours or more in the activity during the year.
2. You do all, or nearly all, of the work in the activity.
3. You work more than 100 hours in the activity during the year, and no one else works more than you do.
4. The activity is a significant participation activity (SPA), and the sum of the SPAs in which you work 100–500 hours exceeds 500 hours for the year.
5. You materially participated in the activity in any 5 of the previous 10 years.
6. The activity is a personal service activity and you materially participated in that activity in any three prior years.
7. Based on all of the facts and circumstances, you participate in the activity on a regular, continuous, and substantial basis during that year. Note that this test only applies if you work at least 100 hours in the activity, no one else works more hours than you in the activity, and no one else receives compensation for managing the activity.

 

 

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