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Suspended losses of decedent

rootesrooter
Level 3

The taxpayer died with considerable suspended passive rental losses.  As I understand it, the taxpayer can make use of those losses on his/her final return, but only to the extent that those losses exceed the difference between DOD FMV and (adjusted?) basis.

But how to enter this in Lacerte?  Does it require a footnote? 

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9 Comments 9
rootesrooter
Level 3

No reply yet?  Nuts, I have exactly the same question.

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abctax55
Level 15

@rootesrooter 

It's YOUR question, from 2021.

 

"Tax software is no substitute for a professional tax preparer"
sjrcpa
Level 15

LOL 🤣


Ex-AllStar
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rootesrooter
Level 3

Oye! 😂

rootesrooter
Level 3

Er.. I guess I STILL have exactly the same question. 

And no answer. I've searched elsewhere, hoping another software product would have a usable solution. Somebody dying with a lot of suspended losses and a large step-up can't be THAT rare, right?

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PhoebeRoberts
Level 11
Level 11

Any input that gets you the desired output is fine; when it comes to K-1s, the IRS sees none of the input and only the output.

Do a schedule in Excel. Figure out what losses, if any, free up, for each pass-through. Set up new K-1 entries for those entities, assign those allowable losses to the freed-up entity, and mark them 2=delete next year.

A large step-up usually eliminates the problem. It's only an issue when, and to the extent that, the PAL is larger than the step-up.

rootesrooter
Level 3

Sorry, got the PAL and step-up reversed.

No pass-through entities involved. Just a taxpayer-owned rental condo.

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PhoebeRoberts
Level 11
Level 11

Same theory. Adjust the carryover so the total allowable amount is right, and mark it 2 = dispose next year.

rootesrooter
Level 3

Many thanks!

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