Form 461

[mhlester]

Hi, everyone,

My client has a large suspended passive loss from a partnership that leased an airplane. He did not participate in the leasing activity personally but hired a manager/pilot to do that. Lacerte has included the loss on form 461 and limited it to 524,000. I did not think the activity was a trade or business and would not be limited to 524,000. I understand the determination of whether an activity is a trade or business is made at the partnership level.

Did Lacerte correctly apply the limitations? If not, is there a way to override the inclusion of form 461 in the return?

Thanks, Michael

[mhlester · Accepted solution]

Hi, all,

I just found the override in the Interactive data entry for the partnership.

Part II - Information about the partner...

about midway down

Subject to Section 461 limitation of business losses 1=yes, 2=no [O]

Thanks, Michael