K-1 Prior year loss

[B Payne]

I have a K-1 from a real estate partnership this year (new build multi family apartment complex).  The real estate was sold this year with a substantial gain.  However, there was a large depreciation entry in 2020 when the asset was placed in service.  That resulted in a loss in 2020.  The loss was not deductible in 2020 as this was a passive loss and there were no other capital gains to net against this loss.  Turbo Tax is not transferring over the prior  unrealized loss into the 2021 return, overstating the 2021 gain.  How do I adjust the 2021 return to reflect the actual/correct gain.  

[Anonymous_ · Accepted solution]

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@B Payne wrote:

....The loss was not deductible in 2020 as this was a passive loss and there were no other capital gains to net against this loss.  

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I cannot discern what occurred in the carryover from 2020 to 2021, but passive losses cannot be used to offset capital gains. 

Passive losses can be used to offset passive income and suspended losses are released upon a sale of the property to an unrelated third party.

[B Payne]

Thanks you for your answer.  I did resolve issue with the prior year loss not carrying over...it was an operator error.  I was changed computers and I ended up copying an old version of the return that did not have the particular K-1 entered from the old computer.  Once I transferred the right file (final filed version) into the 2021 return everything came in properly.