Client had a passive loss carryforward in 2014 that was not reported on 2015 - 2017 Forms 8582. Can I treat it as a PYA on the 2018 return?

Forum|Forum|6 years ago
December 7, 2019
2 replies
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Client's 2014 passive loss carryforward did not carry over to the 2015 Form 8582. Can I treat it as a prior year adjustment on line 27 of Schedule E? Or, do I have to amend the tax returns from 2015 - 2017 to show the PAL being carried forward to all 3 tax years? He has enough passive income in 2018 to absorb most of the 2014 carryforward loss.

Thank you in advance for your help

ProSeries Professional

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Best answer by sjrcpa

I would rerun 2015-2017 returns to see if anything changes. If yes, file amended returns for those years. If no, I'd just adjust the prior year losses on the 8582.

sjrcpaAnswer

Level 15

I would rerun 2015-2017 returns to see if anything changes. If yes, file amended returns for those years. If no, I'd just adjust the prior year losses on the 8582.

The more I know the more I don’t know.

abctax55

Level 15

" I'd just adjust the prior year losses on the 8582"
Just document the trail of "non-use" in prior years in case of a future inquiry.

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