K-1 recognition

[hjohnt]

When I enter a K-1 showing a significant loss it doesn't seem to reflect it. ie, I fill out the K-1 just like I did last year and instead of showing a $24,450 loss it just shows a zero. I have five K-1 forms with 4 showing significant losses and one showing a modest profit. All of them show a zero beside the respective entry but the one with the profit slightly changed my taxes due amount. I've entered and re-entered the numbers and can't figure out why it's not reflecting my losses. Note: most of my income is from real estate rentals so the losses should offset this. All the K-1 are passive in that we're not actively involved.

[JosephS1]

Without being able to see the other entries in your return, there could be multiple reasons the losses are not being utilized in the current return.  There are income limitations for other income items and such other similar items.  For us to be able to assist you further, I suggest you send us a token of your input so we can better diagnose your issue.  Be assured that no personal information is included in the diagnostic copy. Just the data entries.  For us to receive the diagnostic copy we need you to follow the following steps if you are using TurboTax online (I will list the steps for TurboTax desktop below):

1. Sign in to your TurboTax account in a browser
   • If you are using the TurboTax Mobile app, you must sign in to TurboTax.com from a browser (on your phone or other device) instead
2. Open or continue your return
3. Select Tax Tools, and then Tools
4. In the Tools Center pop-up, select Share my file with Agent
   • You will be notified that all personally identifiable information (PII) is being removed
5. Note, and best to write down the seven-digit token number that appears
   • Relay this token number to us
6. Select X to close the Tools Center pop-up

If you are using TurboTax desktop, please use the following steps:

1. Switch to interview mode in TurboTax
2. Go to any screen except the Welcome screen
3. From the menu, select:
   • Online if you are on a PC
   • Help if you are on a Mac
4. Select Send Tax File to Agent
   • You will be notified that all personally identifiable information (PII) is being removed
5. Note and best to write down the seven-digit token number that appears
   • Relay this token number to us
6. In the pop-up, select Send to save a copy to your computer.

Once we receive this, we should be able to look closer at the issue you are having and hopefully come to a resolution.

@hjohnt 

[hjohnt]

The token is 1132907. Additional note: I qualify as a real estate professional so essentially ALL of my real estate rental income of $69K should be wiped out by the $73K losses from syndications. Something is wrong somewhere and I'm stymied as to what's amiss. Thank you for any help you can provide.

[JosephS1]

Thank you for the token and allowing me to view the diagnostic copy of your return.

Even though you listed yourself as a Real Estate Professional, as you obviously are from what I was able to see, you also checked that you did not materially participate in any of the K-1 items.  Checking that you did not materially participate automatically has the system determine that it is a passive activity unrelated to your rentals for which you do actively materially participate.

If you can substantiate in any way material participation in the K-1 rentals, either by having a vote or say in the management of the partnership or item that is rented, then checking yes to material participation will enable the losses to be recognized currently.

One other observation is that you show a sizeable K-1 loss for 2021 but only 1 of your K-1's is listed with a beginning capital balance nor did I see any dispositions of any prior K-1's.  You may want to check to see if you listed the 2021 K-1 as materially participating to enable the loss to be recognized.

@hjohnt