How to trigger form 8582 for Real Estate Losses

Forum|Forum|2 years ago
May 12, 2023
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Last year, I had rental property losses of -$15, 727 (shown on Sch. E ln. 26). My earned income was $4,500 and I materially participate in my rental properties. Since my modified AGI is less than $100k, Turbo Tax subtracted the loss from my income resulting in an AGI of -$11,227.

1. How can I get TT to generate for 8582 so I can carry forward my losses to future years?

2. Am I required to elect a safe harbor or QBI on the properties that generated the loss in order to carry them forward?

Critter-3

What you want you cannot do ... you are misinformed. The Sch E was correct so no form 8582 is or was required.

What you may have was an NOL on the return (not just the Sch E) and that is what you need to carry forward.

Beginning in 2018, the election to forego the carryback period only applies to farm losses and insurance companies.

You can calculate your NOL on the Worksheets in Publication 536.

See https://www.irs.gov/publications/p536#en_US_2018_publink1000177330

TurboTax does not support Form 1045, but the form is necessary (for farm losses and insurance companies) for NOLs arising before 2018 to apply for a refund.

It may be necessary to file Form 461 if the NOL exceeds a certain amount.

See https://www.irs.gov/instructions/i461#idm139894064530528

TlujanAuthor

@Critter Should I continue to treat the loss as a NOL even though last year's losses were considered QBI losses from rental real estate?

Last year, I elected to treat all of my rental properties separately as a Qualified Business in which I materially participated. This year and in future years, I don't intend to elect the safe harbor for the QBI Deduction because I neither have earned income, nor do I wish to keep contemporaneous records for the 250 hours required to qualify.

Last year's losses on my rental properties are on showing on Line 6 of the Qualified Business Deduction Summary as: QBI loss carryover from Form 8895 line 16 is -$15,727. It is also showing the same amount on line 29 on the Federal Carryover Worksheet as a "Qualified business loss carryforward"

Critter-3

QBI losses and an NOL are not the same thing and are not mutually exclusive no matter how you treat the QBI decision. Same as the NOL and the Passive losses are not the same thing and not mutually exclusive.