Question

Rental expenses > than rental income and AGI >150K

Forum|Forum|4 years ago
January 29, 2022
2 replies
0 views

My AGI is >150K and my rental expense and other rental expenses are more that my rental income.

Im not a real estate professional., and the result on my schedule e is a loss.

However Turbo Tax 2021 and previous ones when this occurs deducts from my gross in come as a loss on the 1040 form.

I thought that you cant take a loss (based on the expenses) if your income is greater than 150K ?

Why does turbo tax do this?

Carl11_2

Employee

Have you yet completed your tax return in its entirety so that the programs "knows" what your final AGI is? I ask, because you haven't indicated what version/flavor of TurboTax you're using. I do know if using the Home & Business version (desktop) or the Self-Employed version (online) that you complete the rental section before you even get started on personal income. In such a case, the program can't possibly know your "true" AGI if all that has been completed is the Rental & Royalty Income section of the program.

Once you complete the tax return in its entirety, the program performs "final checks" before you e-file, and will adjust as necessary.

R

rlb_nyAuthor

Im using the windows premier version that has the latest updates (2021).

Yes I ran the final checks and no errors where found. Taxes are complete and it still allows a deduction for loss on my rental expenses (rental expenses > rental income on schedule e and then on 1040 sheet) even though my AGI >150K and im not a real estate professional.

Also this is consistent with the previous turbotax premier versions starting back in 2018, 2019, 2020 and now 2021.

I was first alerted by NYS who identified the error in my 2018 version. I went through several iterations and spent hours in trying to identify if this is a bug in turbotax or if it is legal.

I even contacted turbotax support several times and they issued problem numbers but they closed them.

So wondering if this is legal or a bug. You should be able to easily replicate this by updating a W2 and then add the real estate expenses to see it.

Just would like to know if this is a bug with TurboTax or not and if so they should fix it and even refund my penalties. Im sure I cant be the only one that came across this.

Carl11_2

Employee

@MayraM would you or one of the other moderators check this out please?

A

AmeliesUncle

This is part 2 ...

Because you are using the Windows version, can you go to the "Forms" (I think it is in the upper right hand corner), then on the left side look for the "Schedule E Worksheet". Can you take a screen-shot of a portion of that (make sure no personal information is showing).

Below is a blank version of the information I want to see (your version might not look exactly as this shows, but it should be fairly close).