Question

Prior year non deductible expenses on rental property

Forum|Forum|3 years ago
March 14, 2023
1 reply
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I have read several answers to questions on this but am still unclear how to come up with the prior year non deductible expenses. Is it simply the expenses in excess of income? If I've been using Turbo Tax for several years why wouldn't that number transfer over?

How is this different than Carryovers?

TurboTax Home & Biz Windows

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RobertB4444

Non-deductible rental expenses are exactly that - expenses that you aren't allowed to deduct. Sometimes those expenses are related to personal use, sometimes they are required to be capitalized. Prior year unallowed losses are different. Those are the losses that will follow the rental property until it is disposed of or you use them up, whichever comes first.

The prior year non-deductible expenses should be pretty easy to add up. The prior year unallowed losses are harder. They are determined by your other income as well as your filing status.

Here's a really good thread on prior year unallowed losses.

@truckmassey

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C

cmvdragon

You said: Non-deductible rental expenses are exactly that - expenses that you aren't allowed to deduct. Sometimes those expenses are related to personal use, sometimes they are required to be capitalized.

How do i find this? Can you give examples?

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cmvdragon

I honestly don't recall those finer details you're asking for. However:

All of your carryover/suspended losses will be on IRS Form 8582 in your 2022 tax return. But like I said, if you don't have that form in your 2022 tax return, then you do not have any carryover/suspended losses to report or claim on your 2023 tax return and you'd enter a zero in all those boxes.If you do have the form 8582 in your 2022 tax return and line 3 of that form is zero or greater, you have no losses to carry over to 2023.

With the new laws enacted in 2018 allowing the deduction of up to $25K of rental losses from "other" ordinary income if certain criteria are met, it's becoming more and more common for rental property owners to not have any losses to carry over, and therefore not have anything to report using the form 8582. If you do have the form 8582 in your 2022 tax return and line 3 is zero or higher, you have no carry over/suspended losses for 2023. You'd enter a zero in all those boxes you're asking about.

Thank you, sounds logic, that's what I will do, enter zero.