I am using the desktop edition. On top of the screen it shows the estimated taxes due and it updates as I go. But I noticed that it doesn't update after I have input few k1 with losses. I am trying to figure out how much tax I need to pay before 4/18 with few k1s delayed until Sept.
I will file an extension. But I need an accurate tax # by 4/18. The few late K1s have very small tax impact. Do I must delete those late K1s so that I can fool TT that all K1s are done in order to get it to give me the tax # that reflects the K1 losses?
Yes. The disallowed passive losses are suspended and are carried forward. They can be used to offset future passive income. Or you can deduct them in full in the year that you dispose of your entire interest in the passive activity.
Please read this IRS document for more information.
Can you clarify; are your K-1s from investments in MLPs (Master Limited Partnerships) or similar? If so, your income and losses are passive. Your losses can only be used to offset similar passive income. If they are not MLPs, have you checked the box to indicate that all investment is at risk? Did you actively participate in the activity? If not, it is passive. If you did, make sure you indicated so in the entry.
Hi David,
Thank you so much for your answer. The K1s are for residental rental properties and they are indeed passive losses. I did check the box 'all investment are at risk', but I am not 'actively participating in the activity'.
So if the losses can only be used to offset other passive gains, and total losses are higher than total gains, will the losses be carried over for offsetting future gains?
Thank you
Yes. The disallowed passive losses are suspended and are carried forward. They can be used to offset future passive income. Or you can deduct them in full in the year that you dispose of your entire interest in the passive activity.
Please read this IRS document for more information.