How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask USTaxAdvising Your Own Question

USTaxAdvising
USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1087
Experience:  US Taxation specialist.
58296935
Type Your Tax Question Here...
USTaxAdvising is online now
A new question is answered every 9 seconds

Own a condo (not my residence) where they manage short term

Resolved Question:

Own a condo (not my residence) where they manage short term rentals, last year $7146 income received as shown on my K-1. Expenses from owning the condo were $10153 (depr., assoc dues, util, etc) all of which I know is passive. No other activities to report on form 8582 or sched E. My adjusted gross income including the $7146 is $67,000.

looking at form 8582, not sure to list the $7146 on worksheet 3 column(a), and the $10153 in column (b), or just the $3007 net loss in (b). These numbers flow to Part 1 3abc and it seems if no income is shown then at the end of worksheets 5&6 and Part IV line 15 and 16 no loss is allowed for Sched E, line 28(f)A.
Do I even need to file 8582 or can I just list the $3007 loss in Sched E, line 28(f)A?

Yes tomorrow is the 15th and I need to file so any help is appreciated, It won't hurt too much but hard to believe I cant offset any of the loss.

thanks
Submitted: 1 year ago.
Category: Tax
Expert:  USTaxAdvising replied 1 year ago.

USTaxAdvising :

Hello,

USTaxAdvising :

You are correct that the activity is a passive activity.

USTaxAdvising :

You have a loss here and since it is a passive activity and you are not participating (you are using a rental company) you cannot deduct the net loss, the loss of 3007 gets carried forward to the next tax year.

USTaxAdvising :

Make sense?

USTaxAdvising :

You would want to file the 8582 to calculate the net loss and show that you cannot deduct it, this form can be used as support for your return next year when you can claim the loss if you have passive income.

Customer:

and I can't even deduct the $7146 part of the expenses from the income of the same amount?

USTaxAdvising :

I am a little confused, I am assuming here that you have 7146 of income and 10153 of deductions leaving a net loss of 3007. You can only deduct up to 7146 this year. Therefore the remaining 3007 of deductions get carried forward to the next tax year.

Customer:

so thats the question, if I can deduct any of my expenses to offset the income. The 3007 is the excess which I know must be carried over, but my original question is about where these figures (7146 income, 10153 expenses) go on form 8582? The income is shown on the K-1 from the partnership, and the expenses are all my costs of owning the unit.

Customer:

The way 8582 is set up is frustrating.

USTaxAdvising :

I hear ya, let me check the 8582, I'll be right back

USTaxAdvising :

Ok so basically on the 8582:

USTaxAdvising :

Line 3a = 7146

USTaxAdvising :

line 3b 10153

USTaxAdvising :

line 3 c 0

USTaxAdvising :

3d & line 4 = -3007

USTaxAdvising :

skip parts II and III

USTaxAdvising :

line 15 = 7146

USTaxAdvising :

That's it, the form is then filed with your return to show that you have a 3007 passive loss carry forward.

USTaxAdvising :

Make sense?

Customer:

I agree thats the only way it would seem to work, I think my confusion is due to the term NET ... cause based on my teaching and experience Net would mean the income minus the expenses, which is the 3007 and with no income listed (since it was net-ted out) none of the rest of the form goes anywhere, if you know what i mean.

Customer:

But I still need to do worksheets 3, 5 &6 as well, correct?

USTaxAdvising :

I understand. Basically you get to the net on line 3 d.

USTaxAdvising :

only worksheet 3 and 5, not 6. You dont have any allowed losses.

USTaxAdvising :

I wouldn't bother with worksheet 6 either since you dont have any other activities. These worksheets arent required to be completed to make your return complete.

Customer:

and list the 7146 on sched E under passive losses.

USTaxAdvising :

No it would go under passive income on page 2 of the schedule E because you got a K1 for it. Part II line 28 column G

USTaxAdvising :

Then your unreimbursed expenses are reported on a seperate line on the Schedule E page 2 part II and reported in column f but only up to the amount of your income. You do not want to report all the deductions on Schedule E only 7146.

USTaxAdvising :

The 8582 shows your carry forward loss of 3007.

USTaxAdvising :

This is a little confusing because you have unreimbursed partnership expenses. Note that the description you use for this on part II should be "UPE" per the IRS instructions.

USTaxAdvising :

Make sense?

Customer:

thats what I meant ... so both column f and g have values 7146 and net each other out to $0 by line 32 sched E.

USTaxAdvising :

In this instance yes, because you have UPE, you have to adjust your UPE on the Schedule E page 2 to not overdeduct and take the loss that's not allowed.

USTaxAdvising :

Are you good? it's getting a little late and I am ready to sign out but just want to make sure you are good before I leave since the deadline is tomorrow.

Customer:

So in Part 2 of E I would have 2 items ... row A for the partnership income and a row B for the UPE

USTaxAdvising :

exactly :)

Customer:

thanx much and have a good night ...

USTaxAdvising :

no prob. :)

USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1087
Experience: US Taxation specialist.
USTaxAdvising and 2 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.