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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29798
Experience:  Taxes, Immigration, Labor Relations
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Does a passive activity K-1 show carry forward losses? Or

Customer Question

Does a passive activity K-1 show carry forward losses? Or can it be calculated from those numbers?
Submitted: 5 months ago.
Category: Tax
Expert:  Lev replied 5 months ago.

Passive losses from that and other activities are combined on the individual tax return - form 8582

On form current year passive losses are combined with prior year un-allowed passive losses.

And those which are carried forward to following years are calculated and reported

Here is the form

Customer: replied 5 months ago.
I asked the question about what was on the K-1 specifically, because I need to recreate what should have been on the 8582's in prior years.So now -- If I owned a PAL Form 1065 PTP from 2008 forward, and but only have the K-1's from 2011 forward, can I calculate the accumulated passive loss ?
Or can I only calculate the accumulated loss from 2011 forward.
Customer: replied 5 months ago.
No thank you on the call, yet.
Expert:  Lev replied 5 months ago.

You need to re-calculate all prior disallowed passive losses.

If you are using prior disallowed passive losses - and these losses were not reported on prior tax returns - you will need to attach a statement with explanation of facts and reasoning.

For that purpose - you may use form 8275

Customer: replied 5 months ago.
Lev, in the case of passive activity, the 8582 is only required if there is ever a gain.
"Beginning in 2011, Form 8582 must generally be filed by taxpayers who have an overall gain (including any prior year unallowed losses) from business or rental passive activities. See Exception under Who Must File, later. Income Tax." - source: IRS.
This tells me I don't need to file the 8275 or the 8582. Right?
Expert:  Lev replied 5 months ago.

According to instructions

- Form 8582 is filed by individuals, estates, and trusts who have passive activity deductions (including prior year unallowed losses).

Purpose of Form - Form 8582 is used by noncorporate taxpayers to figure the amount of any passive activity loss (PAL) for the current tax year and to report the application of prior year unallowed PALs.


According to you reference -

IF your client had "any prior year unallowed losses" - the IRS would GENERALLY require to file form 8582 starting 2011.

Your situation doesn't meet listed exceptions - and because of that your interpretation doesn't seem correct.