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I believe I have the new client's prior year passive losses properly entered on Schedule E, but I'm not seeing any offset against client's other passive income. Client has ample passive income, but not Schedule E passive income. Thank you!
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@Nat Hussey wrote:
Client has ample passive income, but not Schedule E passive income.
What exactly is that other passive income, and where do you have it entered on the tax return?
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The other passive income consists of capital gains, dividends, distributions, etc. My sense is that it's an apples-to-oranges thing where even if those income sources are passive, the schedule E carryovers need to offset other Schedule E income which the client did not have this year. ?
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Dividends and Capital Gains are considered "Portfolio Income" not passive income. Thus they do not release passive losses from their prison cells.
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That's what I thought, but you explain it well.