Client with a Vacation/Rental property allocated 299 Rental days / 66 days personal (~82% rental use)
The total rental loss is $116K - Proseries is classifying as "other passive exceptions" and allowing ~$32K current year deductible rental loss on Schedule E and Schedule 1. Shouldn't this be "0"?
Shouldn't the full $116 rental loss be suspended and show up on 8582?
First thing I need to ask, HOW is there a loss of $116,000?
And just check, did this property go back-and-forth between personal and rental use? Or was it 100% personal then converted to 100% rental (or vice versa)?
299 rental days and they only received $17,000 for that type of property? Is it being rented at Fair Market Value? Something seems fishy to have come up with a loss of $116,000.
And just to confirm, that supposed $116,000 loss is only from this one year?
And please confirm my other question about it being back-and-forth between rental and personal use, versus just being converted to 100% rental or personal use.
The loss numbers are irrelevant to the question. It's a Vacation Rental (i.e. these people use the property as vacation property every year and also rent it out.) This individual is NOT a real estate professional.
Rented FMV 299 days
Personal use 66 days
Proseries is automatically classifying (X) as "other passive exceptions" thus allowing a % of the current year loss as a deduction. AGI is north of $3 million. P/Y return prepared by Big 4 and similar scenario and % of the loss deducted as "other passive exceptions".
I guess the question is the proseries worksheet reliable ?
The loss numbers are irrelevant to the question.
While that is true, I'm not going to help you through a question when the basis of the entire question seems really wrong. I would be happy to try to help you if I understand why such a large loss occurred. Without an explanation, something seems REALLY wrong and I wouldn't want to help you prepare an incorrect tax return. With the limited information you have provided, it doesn't seem to be rented at Fair Market Value, in which case Schedule E could be the incorrect place on the tax return for it.
I agree with Bill. $17K / 299 days is $400/week. In what state can I rent a $2.5Mil home for $400/week?
I don't do enough of these to know the rules cold. Mostly I'm just thinking out loud here. With that much personal use you should be hitting a 280A limitation preventing just about any loss. Exceptions would be for RE Tax and Mortgage Interest IF this qualifies as a second home. RE Tax will end up with other taxes and the total would be limited to $10K, so I can't imagine any of that would be allowed. Mortgage interest would be limited to interest on $1M of acquisition debt. Some of that *might* be allowed but ProSeries isn't going to be able to apply the limit, you'll have to do it manually.
"Rented FMV 299 days"
There seems to be no unoccupied dates at all, which is unlikely. Also, there seems to be a missing preposition or adjective or verb. Is that "Was rented at Fair Market Value for 299 days" or perhaps "It would rent for $X and would be computed as if it had been rented for the remaining 299 days."
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