Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Unallowed losses when rental is converted to primary residence

Highlighted
Level 1
last updated ‎March 30, 2020 5:16 PM

Taxpayer had prior unallowed rental losses due to income over $150k. Last year they made the rental their main home. Do I need to keep a blank Sch E and / or Form 8582 going forward in order to deduct these losses against a future sale? Or if they convert it back to a rental in the future? If so, how do I stop the losses from being allowed currently (since the taxpayers income is now under $150k)?

Labels (1)
0 Cheers
3 Replies 3
Highlighted
Level 12
last updated ‎March 30, 2020 5:16 PM

ProSeries doesn't do it correctly.

You are supposed to keep filing the 8582 and not file a Schedule E, but ProSeries won't let you do that.  I think most people just delete it all and manually keep track of the 8582 for when it is needed.  Filing a blank Schedule E and keeping the 8582 is another option, but then you would need to override to prevent the $25,000.

Highlighted
Level 10
last updated ‎March 30, 2020 5:16 PM

I printed one for my friend/client who stopped renting the shore home several years ago. It has the c/o losses.

He sold it in 2019, so now I re-entered the losses.

** I'm still a champion... of the world! Even without The Lounge.
Highlighted
Level 1
last updated ‎March 30, 2020 5:16 PM

Thanks for the info!

0 Cheers