I am amending a 2017 return. I earned well over 150K that year and have a spouse who is real estate professional. We are both actively involved in the management and maintenance of our real estate assets (and my spouse buys and sells real estate). One property is owned in our names and one in a multi partner LLC (My spouse and I). Losses from the LLC amount to around 48K. Losses from the property not in the LLC was around 2K.
On Schedule E, for the property not in the LLC:
Line 21 is -2,159 (i.e., a net operating loss)
Line 22 is Deductible rental real estate loss after limitation = 0 (i.e., the loss from this property was not applied).
It is reported in Form 8582 as an un-allowed loss.
There appears to be no mechanism or form in Turbotax that states this a (non-passive) carry forward.
Is this a (non-passive) NOL carry forward?
If so - should I record it anywhere else for use in later years?
for married couples filing a joint return, the spouses activities can be combined to determine whether they materially participate in their rental real estate activities. but one spouse must be the 50% rule and 750 hour rule.
(7)Special rules for taxpayers in real property business
so I believe there should be no PAL limit on the schedule E property.
possibly bad news. unless you live in a community property state the LLC was required to file a partnership return for each year it had activity. the penalty can be as much as $5,000 per year.
Thanks. Based on your certainty that she should be considered a professional - I figured out the problem. I had to change an obscure checkbox that prevented her from being considered a real estate professional.