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April 14, 2023
Question

RENTAL INCOME AND BUSINESS LOSS REPORTED ON THE SAME k1 fORM 1065

  • April 14, 2023
  • 1 reply
  • 0 views

Why won't Turbo Tax allow me to deduct business losses from my rental income which exceeds the loss and is reported on the same K1 form from one business entity.  Instead Turbo Tax makes me file two separate K1s and does not combine them, so I get no benefit fr4om the los and pay taxes on the full rental income- approximately 50%

    1 reply

    Carl11_2
    Employee
    April 14, 2023

    Passive losses can only be deducted from passive income. Since your business income is apparently non-passive, you can't deduct your passive rental losses from that non-passive business income. The passive rental loss just gets carried over.