Material Participation to Recognize Rental Property Losses

Forum|Forum|3 years ago
March 13, 2023
3 replies
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I have losses from a new rental property that I put into service in 2022. I also qualify for material participation. However, TurboTax is not letting me recognize the loss (i'm assuming due to the material participation).

The rental property is held and operated under my personal name and not an LLC, though that's not supposed to affect taxes, depreciation, losses, etc.

Any ideas as to why TurboTax isn't recognizing the loss?

Best answer by Anonymous_

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Anonymous_

Employee

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Rich_FLAuthor

I should have also specified that this is a short term rental property. For STR, there's another classification in addition to the "Real Estate Professional" status and that is "Material Participation".

One of the qualifications for material participation is "at least 100 hours of participation and more than any other person at the property".

I qualify on that criteria. I'm just figuring out how to get TurboTax to recognize that so I can recognize the loss.

Anonymous_

Employee

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Mike9241

it's the rules for passive activity losses. unless it's reportable on schedule C because significant services are provided, then by definition (tax law definition) the income/loss is passive. passive losses are subject to limitations. see form 8582.