Calculating the special allowance for a passive loss from a rental real estate with active participation for Form 1040NR filers

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Question

My married nonresident client has a passive loss from a rental real estate with active participation. Why doesn't UltraTax CS allow the special $25,000 allowance?

Answer

The special allowance is not available if the taxpayer is married, files a separate return, and did not live apart from the spouse at all times during the year. Married filing joint status is not available for Form 1040NR filers. If the client qualifies, mark the Lived apart entire year field in Screen 1040 to have UltraTax CS calculate the special allowance.

Related topic: 1040NR - Nonresident alien return FAQs (1040)

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