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Proseries is not automatically calculating my rental loss in Schedule E

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Level 2

One of my clients has a rental loss of the year, and proseries is not calculating it automatically like usual.  

On schedule E Worksheet, I usually enter the property's info and click the boxes for "active participation" and "Material Participation", then i proceed to enter expenses.

Line 21 on Schedule E is resulting in a loss.  However,  line 22 "Deductible rental loss" is 0.  If i scroll down it says "Passive dissalowed loss" all the way to the bottom.  Nowhere in the return am i stating that this is a passive activity as the owner actively participates in the rental business.

The only way i got proseries to calculate this loss is by checking box "G" for "Other passive exceptions", I dont even know what that means.

Has anyone encountered the same issue?


Thank you

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Level 12

Real Estate Rentals are automatically passive unless there is a special provision to treat them as non-passive (such as self-rentals, rental of land, and Real Estate Professionals).  Active and/or Material Participation do not change that.

So by default, the passive losses are not allowed and are carried forward on Form 8582.

If the taxpayer "actively" participates there is a special provision to deduct up to $25,000 of passive losses *IF* the taxpayer's income is under $150,000.  Because your taxpayer's income is over $150,000, your taxpayer does not qualify for that provision.


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6 Replies 6
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Level 15
Level 15
Do they have too much income to allow the loss?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 8
look at 8582
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Level 2
Their total combined income is $197k, does that exceed the allowed income limitation?
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Level 8
look at 8582, please.  on which line does this activity show?
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Level 15
Level 15
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Highlighted
Level 12

Real Estate Rentals are automatically passive unless there is a special provision to treat them as non-passive (such as self-rentals, rental of land, and Real Estate Professionals).  Active and/or Material Participation do not change that.

So by default, the passive losses are not allowed and are carried forward on Form 8582.

If the taxpayer "actively" participates there is a special provision to deduct up to $25,000 of passive losses *IF* the taxpayer's income is under $150,000.  Because your taxpayer's income is over $150,000, your taxpayer does not qualify for that provision.


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