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

[singh]

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.

[TaxGuyBill · Accepted solution]

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?

[abctax55]

Good catch. A fully taxable sale on disposition should have triggered any PALs in the prior year.

[Just-Lisa-Now-]

I "think" (I don't have the program open right now) its down at the very bottom of Sch E.

[Just-Lisa-Now-]

Capital loss carryover you should find a Carryover worksheet in the list of forms.

[abctax55]

Aren't we talking about PAL's?

[daleh507]

2019 form 4797 loss was 124,594 had carryover loss to 2021 of 52,737, where do i enter this 52,737 carryover loss on 1040, 2021