Form 1065/K1: Losses not showing

Forum|Forum|4 years ago
April 18, 2022
1 reply
0 views

Greetings all, I have researched this issue for hours now and am pretty convinced that the problem is in the software, not my head, but I'm sure I'm not the first one to think that.

I have net losses on a K1. I am a general partner, active manager and all my investment was at risk. I enter all this information correctly, but TurboTax always puts my losses at 0. I had similar losses last year and Turbotax allowed me to report the losses. But this year, for some unknown reason, TurboTax won't allow it.

I'm not a tax professional, but I am a lawyer and have been doing my taxes on TurboTax for years and K1 losses have shown up until this year. Part of what is making me think this is a glitch is that I have seen others post on the issue (in this forum and elsewhere). Any ideas?

Thank you in advance!

LudwigVan_fan

Employee

First, I'm not an expert on TT. I know more about tax law than TT.

However, I ran a test through TT Home & Business edition. I entered a "test" Sch K-1 as General Partner or LLC manager. Checked domestic partner; Filled in test amounts in the capital account information.

Checked "Rental Real estate - Box 2" for type of activity for the 1065

Answered yes to materially participate

Check both boxes for: spent more than 750 hours in the RE AND spent more than 50% of my work-related time involved in RE.

When I did that, it gave me full losses.

I then unchecked the box for 50% of time, and losses were then limited to losses of non-passive income up to $25,000 in losses.

So, in my test software, the calculations were correct.

The only thing I can suggest is carefully reviewing your answers to all the questions, in particular, the answers to spent more than 750 hours in the RE AND spent more than 50% of my work-related time involved in RE.

That's about the only thing I can think of at this point

**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**