Vacation rental property reported on Form 1065 as a multi-member LLC

Forum|Forum|2 years ago
February 27, 2024
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We have a rental property used last year 20 personal days and rented 165 days. Therefore, the property is a short term vacation property. The property is owned by an LLC and we file a partnership F1065. Form 8825 is NOT limiting the loss - instead it is allowing a net loss allocable to each partner, although the K-1 does show Property type as ‘3 Vacation / S-Term’.

However - on TurboTax 1040 program there is no where to show that this loss should be limited to zero and carried over?

so my question is - shouldn’t the loss be limited to zero either at the partnership OR 1040 level - if do - How do I accomplish this

thanks in advance

TurboTax Business Windows

Anonymous_

Employee

The answer here depends upon the nature of the deductions that you reported.

Note that your personal use days, being more than the greater of 14 days or 10% of the days rented at fair value, take the rental out of being subject to Section 469 (PAL rules).

See https://www.irs.gov/publications/p527#en_US_2023_publink1000219123

elainebblanksAuthor

Thanks for your reply!

We are reporting the usual expense for a residence. Property taxes, insurance, legal, etc. We upgraded our interior and have more depreciable assets in 2023 - which TurboTax showed as qualifying for the 80% bonus - which even after I’ve elected OUT of this expense - TurboTax is not limiting the overall loss to zero. Maybe we are allowed a net loss somehow - but I thought if a property qualifies as a vacation ST rental - any losses are not allowed and must be carried over.

am I missing the law - it is there a button in TurboTax I am not seeing? Thx