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Level 2
posted Apr 14, 2022 11:28:42 PM

Is Turbo Tax Self-Employed online version working properly this year?

I have job, self-employment, interest income of $192,xxx and rental property income (loss) of -$18,xxx but Turbo Tax says my total taxable income is $192,xxx. It also says in its explanation, "Your total income of $192,145 comes from adding up your rentals, royalties and other Schedule E income of $0, your state and local taxable refunds of $0, your taxable interest of $18, and the $192,127 you earned at your jobs." How did it get $0 of rental income? Shouldn't it say -$18,xxx? (I didn't yet enter Schedule E income.) In past years, I'm pretty sure our rental income/loss affected our taxable income. Or did tax law change?

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1 Replies
Expert Alumni
Apr 15, 2022 11:18:30 AM

It depends if your rental activity is derived from a business where you are a real estate professional or not.  If not, these are Passive Activity Losses that can only be offset by Passive Activity Income.  If your activity level in the rentals did not change, then the passive losses were not taken in previous years until you reported passive income the loss could offset.  You will see a PAL carryforward this year on your return.

 

For more information on losses and carryforwards see Publication 925.