Question

How do I determine passive losses carryover for a rental property?

Forum|Forum|4 years ago
March 7, 2022
1 reply
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I had a CPA file taxes last year. It was my first year renting the property. I have my tx return to look at, how do I determine regular tax carryovers, Alt Min tax carryovers and/or QBI carryovers. None of this means anything to me. eek!

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T

ThomasM125

The regular loss carryover would be listed on form 8582. The carryover loss amount would be the loss on line 3 less the amount allowed in the current year as reported on line 11.

The QBI carryover loss amount would be on form 8995, on line 16.

For rental property, the alternative minimum tax carryover loss would often be the same as the regular loss carryover, but you may need to consult with a tax accountant to get an exact figure for that. It normally only applies to depreciation on rental appliances and furniture as opposed to the house itself, so it is not normally significant.

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K

katkarp1Author

Thank you for the reply. I have a couple more questions if you don't mind. When looking at my 2020 tax return prepared by a CPA, I see form 8582. You say my regular loss carryover would be the loss on line 3 less the amount allowed in the current year as reported on line 11. "Section" 3 on my form is titled "All other passive Activities" and is blank, as is line 11. From what you are saying, the line numbers don't seem to match between your description and my form. last year, was the first year I rented the property is that makes a difference, so there wouldn't be any carryover to pull from. (I have attached a photo of the form from my taxes. The yellow dot indicated lines where an entry is made. This is the only page of the form).

Second, I see the QBI carryover amount listed on form 8995, on line 16. Now, do I report regular loss carryover (once I figure out the amount) AND QBI carryover? Or is a one or the other? I am not sure why I can't seem to grasp this concept.

Thank you so much for your help.

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mglauner

If you were able to use your Rental Loss last year to offset other income, you are correct that you wouldn't have a Carryover to enter in your 2021 return.

From your 2020 Form 8582, Line 3d would show any unallowed loss from last year. Since Line 16 has an amount, you were allowed to take your loss last year, so don't worry about entering any rental loss carryover amounts or any QBI carryover amounts in TurboTax.

The QBI loss carryover would only be applied if you had positive 2020 QBI that needed adjustment, and since you did not, no entry is needed.

You should see this on Schedule 1, Line 5 for 2020.

Click this link for more info on the Qualified Business Income (QBI) Deduction.