Hello, i am trying to understand the right way to file rental property losses and apply in a future year. Here is a situation. Lets assume
Year1: Rental net = -26000
Year2: Rental net = -5000
Year3: Rental gain = 10000
1) If i am filing in year one and my AGI is over the limit, do i manually carry over the losses, or do i file the losses
ie, do i enter 0 in year 1 and 2 for rental income and file $10k loss myself in Year 3
2) If i file the losses in turbotax, does turbotax automatically carry it forward
3) Does turbotax manually apply these (whatever it can apply) carryover loss in year 3
4) When sold, do i need to manually go estimate the losses myself or does turbotax actually know how to do this
What you do is set up rental property in TurboTax. You will enter the assets (land, building, and any other assets such as appliances). You will enter your rental income for the year, and you will also enter your rental expenses. TurboTax will calculate your depreciation expense, and will determine your overall income or loss from the rental for the year. If you have a loss and cannot use it in the current year, TurboTax will carry it forward until you have rental income that some or all of it can offset. If you sell the property with a loss carry forward, the loss will be used to offset any gain you have on the sale of the property. The key is to set things up properly in year one. See the following TurboTax Help article on reporting your rental income and expenses:
What you do is set up rental property in TurboTax. You will enter the assets (land, building, and any other assets such as appliances). You will enter your rental income for the year, and you will also enter your rental expenses. TurboTax will calculate your depreciation expense, and will determine your overall income or loss from the rental for the year. If you have a loss and cannot use it in the current year, TurboTax will carry it forward until you have rental income that some or all of it can offset. If you sell the property with a loss carry forward, the loss will be used to offset any gain you have on the sale of the property. The key is to set things up properly in year one. See the following TurboTax Help article on reporting your rental income and expenses:
Will turbo tax report rental loss after applying the deprecation? For me I always get 0 income if deprecation is larger than net rental income.
The depreciation deduction is limited by your rental income. Any excess is carried forward as a passive loss to the next year when you have a profit for your rental property.