passive activity loss recovery

Forum|Forum|3 years ago
March 3, 2023
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Can passive activity losses associated with residential rentals be applied towards passive activity gains from an inherited trust? When filling out schedule K1 resulting from trust inheritance in turbotax, the tool asks for passive loss carryovers but it's not clear if it's asking for loss carryovers from previous K1 activity associated with the trust, or if its asking about pending loss carryovers for only the K1 activity.

DianeW777

Yes, however you do not enter any rental activity passive losses to your K1 entry. Enter only what is on your K1 when doing that entry.

Passive losses are all combined on Form 8582 when all income has been entered for passive activities. TurboTax will combine all passive income and losses on Form 8582 for your tax return to determine your deductible loss and any carryover if applicable.

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