Question

TurboTax Business puts passive activity loss on K1s that shouldn't be there

Forum|Forum|4 years ago
March 10, 2022
2 replies
0 views

Hello,

I'm using TurboTax business for the LLC that holds our rental property. We used the rental property more than 4 weeks for last year and any passive activity losses from the LLC should not be showing up on the K1s. However, they do. Does anyone know why the business losses would show up on the K1 when they shouldn't?

Thanks,

Andrew

TurboTax Home & Biz Windows

A

Anonymous_

Employee

This is a bit difficult to comprehend, considering the other rules applicable to rental real estate, but vacation homes (used for more than the greater of 14 days or10% of the number of days during the year that the home was rented at a fair rental) are not subject to the passive activity loss rules.

See https://www.irs.gov/publications/p925#en_US_2021_publink1000104578

E

eloisedaddyAuthor

Are you implying the K1s should have the loss on them? My accountant is telling me otherwise because of the level of personal use.

A

Anonymous_

Employee

Show your accountant the link I posted.

Activities That Aren’t Passive Activities

The rental of a dwelling unit that you also used for personal purposes during the year for more than the greater of 14 days or 10% of the number of days during the year that the home was rented at a fair rental.

E

eloisedaddyAuthor

Accountant is right. You might have misread my question. We used it for personal use for 4 WEEKS. That is, 28 days. So, the K-1s that are issued to each of use as owners of the property should not report a loss in them because we're not entitled to it under the tax laws. None the less, the loss is in the K-1s.