How or where do enter the carryover loss from 2017 for the sale of rental home to 2018 tax return?

Forum|Forum|6 years ago
December 7, 2019
6 replies
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My client sold her rental home in March 2017. She could not take all of her rental loss, and there was loss on the sale which was also carried over to 2018.

She had limitation on deductible loss due to her high income.

Capital gain loss carryover to 2018 was -$15354

Rental loss carryover to 2018 was -$12315

I cannot find the place where I can input these carryover losses from 2017 on form 1040.

Any help, please.

ProSeries Basic

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Best answer by TaxGuyBill

The losses are fully allowed on the 2017 tax return; they are not carried to 2018 (assuming it was sold in a "fully taxable transaction"). If the losses were not recognized in 2017, then the 2017 tax return needs to be amended.

If you prepared the 2017 tax return, you did some things wrong. You needed to check box "H" on the Schedule E worksheet to release the Passive Loss Carryovers. The are fully allowed in the year of the sale, regardless of income (assuming it was sold in a "fully taxable transaction").

As for the loss on the sale, that too should have been fully allowed. The sale should have been reported on Form 4797, and the loss should not be limited. I am unsure what you did there. Did you accidently report it somewhere else, such as Form 8949/Schedule D?

T

TaxGuyBillAnswer

The losses are fully allowed on the 2017 tax return; they are not carried to 2018 (assuming it was sold in a "fully taxable transaction"). If the losses were not recognized in 2017, then the 2017 tax return needs to be amended.

If you prepared the 2017 tax return, you did some things wrong. You needed to check box "H" on the Schedule E worksheet to release the Passive Loss Carryovers. The are fully allowed in the year of the sale, regardless of income (assuming it was sold in a "fully taxable transaction").

As for the loss on the sale, that too should have been fully allowed. The sale should have been reported on Form 4797, and the loss should not be limited. I am unsure what you did there. Did you accidently report it somewhere else, such as Form 8949/Schedule D?