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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
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Experience:  Extensive Experience with Tax, Financial & Estate Issues
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Do you have to file a K1 Tax loss with your personal taxes,

Resolved Question:

Do you have to file a K1 Tax loss with your personal taxes, is it required.
Submitted: 6 years ago.
Category: Tax
Expert:  Stephen G. replied 6 years ago.

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything you don't understand.



I assume you mean the actual loss as compared to filing the K-1 with your return?


Why would you not want to use the K- loss; even if you can't use it this year, you may be able to "carry it back" or with an election to fore-go the carry-back you can carry it forward;


If the loss were to raise your taxes by eliminating some other deduction or credit or creating additional tax; then I think you must claim it; if not, then I can think of no reason why you must claim it;

Customer: replied 6 years ago.
I guess what I am saying is that if it is not going to give me any additional money this year, can I claim it next year when I file my taxes.
Expert:  Stephen G. replied 6 years ago.


Sorry about the delay.......I tried to answer your question twice & it disappeared in cyberspace.


Unfortunately, you can't claim the loss that way. In order to be able to claim the loss at all, for any year, you must initially claim it on your 2009 return. Then, if it generates a net operating loss (NOL) which involves another whole (somewhat complicated) computation, you MUST first carryback the loss to the previous 2 tax years (with an election it can be carried back as many as 5 years & then forward) or with a different election, you can waive the carryback and carry the loss forward (carryforward); but it is carried forward as an NOL, not as a loss from the K-1.


One more thing, before you even get to the point of deducting the loss from the K-1, you must determine that the loss is deductible at must have sufficient tax basis remaining in your investment in the partnership (at risk rules - Form 6198) & passive loss limitations (Form 8582).


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