"Passive activity real estate losses carryover" question in TT appears to be unaware of the existing rental property depreciation carryover

[DaveLaQ]

I'm assuming "real estate losses" here refers to loss from the rental business, since that's the section I'm in.

My rental property's depreciation carryover is listed under Passive Losses Carryover on my 2019 "Carryforward to 2020 Smart Worksheet." It's been entered on my 2020 "Carryovers to 2020 Smart Worksheet." Therefore I would expect TT 2020 to know I have a passive loss carryover and so check the box asking me about it by default. 

So should I check the box because TT is simply not connecting the dots (and I'll have to manually enter the amount)? Or should I leave the box unchecked because TT *has*connected the dots, my loss carryover amount is being used/stored elsewhere, and this question is meaning to ask if I have any *other* such losses not yet entered (and so the question should be re-written more clearly to indicate this)?

[Anonymous_ · Accepted solution]

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@DaveLaQ wrote:

......I would expect TT 2020 to know I have a passive loss carryover and so check the box asking me about it by default. 

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The box to which you are referring will not be checked by default. However, if you transferred your 2019 return into your 2020 return, passive loss carryovers will be transferred into your 2020 return package.

You can check this in Forms Mode.

[DaveLaQ]

Interesting. So should I check the box? Or does it even matter, if I have no other losses to add?

[Anonymous_]

You do not have to check the box if your carryovers transferred and you have no other passive losses to add.

[DaveLaQ]

Memo to TT developers: consider enhancing the text of this question so that we know what is being asked for vs. what's already been brought forward in the background. It's not at all clear in its current form.

[Anonymous_]

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@DaveLaQ wrote:

Memo to TT developers: consider enhancing the text of this question so that we know what is being asked for vs. what's already been brought forward in the background. It's not at all clear in its current form.

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I agree. There should be some sort of text indicating that suspended passive losses should carry over from the previous tax year if the user transferred that previous year's tax return from a TurboTax product. 

[Shapnup]

To TT Developers; I had this same issue come up repeatedly pertaining to rental properties, including on this years 2023 premier desktop version return.  I would think the passive loss carryover would be automatic, since the depreciation was always noted, and carried forward from past to current year.  The way the question is phrased, doesn't help to know if the carryover was AUTOMATIC, vs. there being a need to do any MANUAL entry.  

[AnnetteB6]

If you are referring to the check box that appears in the Property Profile section for your rental properties, it really does not matter if you are a year-to-year TurboTax user whether you check the box or not.  The losses will be automatically carried over.  

If you are a year-to-year TurboTax user and you do check the box, then you will be able to review your carryover amounts on a subsequent screen.

If you did not transfer your prior year return from TurboTax and you have losses to carryover, checking the box will allow you to enter those losses on a subsequent screen.

@Shapnup