Large passive loss with negative income

[qofmiwok]

If you have a large passive loss from schedule K rental income, and $0 other income:

- With active participation do you lose the $25k deduction since you already have $0 income and the deduction would bring you to -$25k?  If not how do you carry it forward to next year as an NOL in TurboTax?

- Without active participation where would it show up as a carryforward to next year?  I'm not seeing it on the carryover worksheet.

Thanks

[Anonymous_ · Accepted solution]

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@qofmiwok wrote:

- With active participation do you lose the $25k deduction since you already have $0 income and the deduction would bring you to -$25k?  If not how do you carry it forward to next year as an NOL in TurboTax?

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Yes, in the instance described you would lose the $25,000 special allowance and there is no carryforward of the special allowance that is not used to offset nonpassive income in a current tax year.

See https://www.irs.gov/publications/p527#en_US_2019_publink1000219124

I.R.C. §469(i)

[Anonymous]

without active participation, the c/o is only shown on the schedule e worksheet.