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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 2880
Experience:  Over 20 Years experience
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Hi, My form 8582 was completed, but the information is not

Resolved Question:

Hi,
My form 8582 was completed, but the information is not flowing to Sch E. I was wondering what might be the reason why schedule E is blank even though form 8582 is showing allowed losses.

Thank you!
Submitted: 10 months ago.
Category: Tax
Expert:  R. Klein, EA replied 10 months ago.

R. Klein, EA :

Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.

R. Klein, EA :

What kind of loss did you have exactly? (from what type of activity)

R. Klein, EA :

What are the amounts on Lines 15 and 16 of Form 8582?

Customer:

it's passive loss

R. Klein, EA :

Yes, I know that. That is what the form is for. Was this rental real estate or investment in a company or what type of investment loss?

Customer:

losses are comming from K-1s

R. Klein, EA :

OK. Thank you.

R. Klein, EA :

And what are the amounts on Lines 15 & 16 please?

Customer:

264,075

Customer:

L15=L16

R. Klein, EA :

And on your Schedule E, Page 2, can you find LIne 29a please

Customer:

more info regarding what info is on the form 8583

Customer:

8582***

R. Klein, EA :

Got it thanks

Customer:

line 29 on shc E is blank

Customer:

that is the issue

R. Klein, EA :

So what this form is telling us is that you had about $265K in passive POSITIVE income

Customer:

but we have lossed as well

R. Klein, EA :

You had current year losses from passive activities over $1MM, with prior year activities of millions

R. Klein, EA :

What Form 8582 is telling you is that the losses allowed are only UP TO the amount of income. The losses OFFSET 100% of current income and no other losses are allowed.

R. Klein, EA :

The forms are calculating correctly as you should have NO schedule E income or loss to report flowing to Form 1040 Page 1

Customer:

one minute let me make sure i understand

R. Klein, EA :

The losses can only be released when one of two things happens: 1) an offset against current year passive income (Which is what is happening here) or 2) you SELL the investment that is losing money and realize the capital gain/loss AND the operating losses.

R. Klein, EA :

So while Sch E looks like it is totaling to zero, in effect, this is correct.

R. Klein, EA :

Those excess losses continue to roll forward.

Customer:

sorry can youexplain to me more

Customer:

what sch E does

Customer:

what info usually go on sch E

Customer:

in what case my sch E would populate?

R. Klein, EA :

Schedule E shows all of the partnerships and S corps (it may need an extra schedule if there are more than 4 total)

R. Klein, EA :

Line 30 and Line 31 should be offsetting amount of $265K

R. Klein, EA :

Line 32 should be zero

R. Klein, EA :

(line 31 is the allowable loss)

Customer:

by my lines 30 and 31 are blank on sch E

R. Klein, EA :

Same effect

Customer:

im still not clear why shc E should not populate

R. Klein, EA :

That may be a function of your software.

R. Klein, EA :

Are there any totals in Line 29a?

Customer:

no

Customer:

sch E is completely blank

Customer:

sch E should have the ammounts right

Customer:

since we have millions in losses

Customer:

and only 245k in income

R. Klein, EA :

Is there anything across Lines 28 (A through D)?

Customer:

all blank

R. Klein, EA :

Did you have any income OTHER than these K-1's?

R. Klein, EA :

There SHOULD be items in lines A-D of 28 on Sch E page 2

R. Klein, EA :

This cannot be blank!

Customer:

no all income comes from k-1s

Customer:

no entity level activities

Customer:

i just wanted to make sure that theoretically numbers should be on the Sch E

Customer:

since 8582 is complted

Customer:

right/

R. Klein, EA :

That is correct. Schedule E needs to have entity information from the K-1s

R. Klein, EA :

But, in your case, it will result in no net income or losses

Customer:

can you plese explain why

Customer:

again

R. Klein, EA :

Even if there are no numbers int he columns, the list of K-1s should show company names and tax ID numbers

R. Klein, EA :

No income or loss because allowable losses exactly offset taxable gains. Not a penny more or a penny less.

Customer:

im concerned why there are no numbers on line 29_32

R. Klein, EA :

There's nothing in Columns (a) through (d)? (Line 28)

Customer:

nothing

Customer:

what if line 16th of 8582 would show loss

R. Klein, EA :

That could only show a loss more than Line 15 IF you sold the investment.

R. Klein, EA :

I am concerned about nothing on Line 28.

R. Klein, EA :

You may wish to check with your software provider on that.

Customer:

yes for some reason sch e is completely blank

Customer:

but aybe it should be blank

R. Klein, EA :

It should not based on our conversation so far

Customer:

since you said losses offset 245k income

R. Klein, EA :

What software are you using?

Customer:

gosystems

Customer:

i just looked at another return

R. Klein, EA :

That is a professional package, no?

Customer:

sch E should have ammounts

R. Klein, EA :

Yes it should

Customer:

even if form 8582 shows income and millions in losses

R. Klein, EA :

But I do not know the GoSystems software package for tech support purposes.

Customer:

yes it's a profesional package

R. Klein, EA :

Are you a tax preparer or this is a personal return?

Customer:

i think i will need to contact tech support at this point

Customer:

something is wrong with the sch E

R. Klein, EA :

This is one of those cases where I can tell you what should be on the forms, but I cannot tell you how to make the software give you the right answer. Sorry about that.

Customer:

yes i just wanted to make sure that i undestand it

Customer:

bcs tech support already told me that it shouldnt be on the sch E

R. Klein, EA :

OK, sorry I could not be of more assistance today

Customer:

thank you!

R. Klein, EA :

Hang on.....let me just check another source in the rules...

R. Klein, EA :

give me 2 mins

Customer:

ok

R. Klein, EA :

Nope, I don't see anything to change my mind about the fact that it should be on Sch E

R. Klein, EA :

Even if the amounts total zero, it should be there

R. Klein, EA :

OK. Have a good evening.

Customer:

Thanks! You too!

R. Klein, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 2880
Experience: Over 20 Years experience
R. Klein, EA and other Tax Specialists are ready to help you

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