I’ve owned a few rental properties for several years, and there are passive losses from 2021 and 2022 for two of the properties that weren’t fully deductible at the time, so they were carried forward. In 2023, my wife qualified as a Real Estate Professional (REP), so we filed our taxes for that year using REP status.
Now, as I’m preparing our 2024 federal taxes with the same REP status, TurboTax has imported our 2023 tax information. It correctly prefilled the passive loss carryovers from 2021 and 2022:
However, it also prefilled a passive loss carryover for 2023 in the amount of $867, which I found confusing.
Since we filed under REP status for 2023, I was under the impression that all the losses from that year should be active losses and have been fully deducted and not carried over (my income was high enough to cover all the losses). I also checked our 2023 tax return but couldn’t find any reference to the $867 amount. I can find the 2021 and 2022 losses in the corresponding tax return.
Usually these prefill by TurboTax is correct. Could this be an error in TurboTax? Or is there a scenario where a carryover from 2023 would still occur even under REP status?
