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March 21, 2024
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TurboTax automatically entering last year's unallowed rental loss as this year's net operating loss?

  • March 21, 2024
  • 1 reply
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I'm using TurboTax Family and Home 2024. I had an unallowed rental income loss (passive income loss) from last year that I couldn't take because my income was too high.

 

This year, my income is below the threshold, so I can take the passive rental income loss (as calculated by form 8582), but for some reason TurboTax is putting last year's unallowed rental loss on this year's net operating loss (Schedule 1, Line 8a).  The program states, "Here is your allowed net operating loss (NOL) carryover you previously entered from your 2022 return."

 

This is incorrect, because that is not a net operating loss. It was a passive income loss, subject to the calculations of form 8582 and is included on Schedule 1 Line 5 (Rental real estate, royalties, partnerships, S corporations, trusts, etc.) But I cannot figure out how to override this in the program, since it is automatically entered.

 

How can I remove this amount from the Net Operating Loss line?

    Best answer by KrisD15

    I think you mean you are using TurboTax Home & Business.

     

    TO DELETE THE NOL

    Select the Business tax and scroll down to 

    Less Common Business Situations

    Scroll down in the section to 

    Net Operating Loss/QBI carryforward Loss    START or UPDATE

    Clear out any numbers, replace with 0 

    OR

    For Desktop, Switch to FORMS (top right)  

    Scroll down to    Carryover Wks    and delete 

     

    TO ENTER THE PASSIVE LOSS CARRIED OVER

    Go to the Rental Section

    If the rental is still active, select EDIT for that rental 

    Select "Property Profile"    

    Third screen in asks about Carryovers, Select "I have passive activity real estate losses carried over from a prior year" and CONTINUE

    Enter the amount on the following screen. If you have not been subject to AMT, enter the same in both boxes or adjust for the AMT amount if applicable

     

    If the rental is no longer active,  

    Go through the rental section to get to that same screen. 

    Enter the property the loss was taken on for the profile to get to that screen 

    Select only the answer to enter the loss carryover

    Select NO it was not rented all year  Enter zero days rented zero days used for personal use

    DO NOT ENTER INCOME NOR EXPENSES

     

    The loss will be listed on Schedule 1 line 5

     

     

    1 reply

    KrisD15
    KrisD15Answer
    March 21, 2024

    I think you mean you are using TurboTax Home & Business.

     

    TO DELETE THE NOL

    Select the Business tax and scroll down to 

    Less Common Business Situations

    Scroll down in the section to 

    Net Operating Loss/QBI carryforward Loss    START or UPDATE

    Clear out any numbers, replace with 0 

    OR

    For Desktop, Switch to FORMS (top right)  

    Scroll down to    Carryover Wks    and delete 

     

    TO ENTER THE PASSIVE LOSS CARRIED OVER

    Go to the Rental Section

    If the rental is still active, select EDIT for that rental 

    Select "Property Profile"    

    Third screen in asks about Carryovers, Select "I have passive activity real estate losses carried over from a prior year" and CONTINUE

    Enter the amount on the following screen. If you have not been subject to AMT, enter the same in both boxes or adjust for the AMT amount if applicable

     

    If the rental is no longer active,  

    Go through the rental section to get to that same screen. 

    Enter the property the loss was taken on for the profile to get to that screen 

    Select only the answer to enter the loss carryover

    Select NO it was not rented all year  Enter zero days rented zero days used for personal use

    DO NOT ENTER INCOME NOR EXPENSES

     

    The loss will be listed on Schedule 1 line 5

     

     

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    writergalAuthor
    March 21, 2024

    Yes, I meant Home and Business. Thanks so much for this!