K-1 Partnership Loss not transferring to Schedule E

JaWa

Hello,

I submitted my tax returns and realized my at-risk rental property losses with a partnership didn’t transfer over to Schedule E Part II. I check yes for Active Participant. Instead the software is filling in Form 8582 for Passive Participant where my income exceeds the amount to deduct any losses. What am I missing in order to claim any At-Risk losses through a Partnership?

Thank you,

John

MatthewD

Hi JaWa,

The 8582 instructions outlines Modified Adjusted Gross Income limitations. The IRS say,

"If your modified adjusted gross income is more than $100,000 ($50,000 if married filing separately) but less than $150,000 ($75,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately)and your modified adjusted gross income. Generally, if your modified adjusted gross income is $150,000 or more ($75,000 or more if married filing separately), there is no special allowance."

Review your return and compare your AGI (line 11, form 1040) to those limits. That would explain why Form 8582 is used on your return for that loss.