1040-US: Entering a prior-year loss on a passive activity (suspended PAL)

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Refer to the appropriate activity below to locate the correct input screen in which to enter a passive activity loss carryover generated in a prior year. 

  • Business: Access Screen C-3, located under the Business folder, and enter the suspended loss under the Passive Activity and Other Information section.
  • Rent & Royalty: Access Screen Rent-2, located under the Rental folder, and enter the suspended loss under the Passive Activity and Other Information section.
  • Farm: Access Screen F-3, located under the Farm folder, and enter the suspended loss under the Passive Activity and Other Information section.
  • Farm Rental: Access Screen 4835-2, located under the FarmRent folder, and enter the suspended loss under the Passive Activity and Other Information section.
  • K1 from a 1065 or 1120S: Access Screen K1-7, located under the K1 1065, 1120S folder, and enter the suspended loss under the Passive Activity Info and Carryovers, Sec 179 Carryover section.
  • K1 from a 1041: Access Screen K1T-2, located under the K1 E/T folder, and enter the suspended loss under the Passive Activity and Other Information section.

Note: The Passive activity code will determine where the loss is reported on Form 8582. For example, activities coded 2=Rental real estate with active participation will be reported on Form 8582 line 1c

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