Generating 8582 for Rental with loss

Forum|Forum|5 years ago
February 4, 2021
17 replies
46 views

I have a client with a rental that they had a loss of 54,698. I am trying to generate an 8582 to limit the amount of Passive Activity Loss to 25,000 so that it will flow over to 8995, and create a carryforward QBI deduction. I previously used Lacerte, now using Pro Series, I think there is a box I am missing but I cannot figure it out. I calculated it the old fashioned way with pencil and paper and know this is how it needs to be filed. There must be a box in the software I am missing. (I used Lacerte previously and am new to Pro Series)

ProSeries Professional

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T

TaxReturnPros

Level 3

If a rental, it's the Active Participation Box on Sech E worksheet

T

TaxGuyBill

@cera smile wrote:
I am trying to generate an 8582 to limit the amount of Passive Activity Loss to 25,000

Are you saying it is currently allowing the ENTIRE loss, rather than just $25,000?

As a side note, a $54,000 loss for one year is extremely large, so you may want to verify that is correct and that something like depreciable improvements are not being deducted.

C

cera smileAuthor

Level 3

Yes, it is trying to report the ENTIRE amount. The loss is because it is a complex of cabins, many of which had to be completely remodeled (first year owning this property).

abctax55

Level 15

Were these units that were undergoing "major" remodeling actually available for rent?

HumanKind... Be Both

N

NJ_EA

Level 3

I'm having the same problem, ProSeries is incorrectly carrying forward the entire loss rather than the $25,000 limitation. Did you ever figure out how to correct this?

abctax55

Level 15

The $ 25000 limitation is the amount 'possibly' deductible in a given year.

The carryover is not limited to $ 25000. The carryover is the entire amount of cumulative losses.

HumanKind... Be Both

N

NJ_EA

Level 3

Sorry, I shouldn't have used the term carryover or carry forward, that was misleading - let me explain it another way:

Client has a $35,000 rental loss. Client is not a real estate pro, so he can only deduct $25,000 of the loss. ProSeries correctly shows a $25,000 loss on Part III of 8582, but incorrectly shows a $35,000 loss on page 1. This is a 1041 return, first year, so no carryover issues, and no other passive income.

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