Question

What happens to "Vacation Home Loss" carryovers?

Forum|Forum|2 years ago
March 31, 2024
2 replies
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On Sched E, I have had rental properties where some Depreciation and Operating Expenses become Carryovers in the Vacation Home Loss limitation column.

Are these lost deductions or do I get them back at some time.

I am concerned especially about depreciation as the Depreciation Report shows it taken as current depreciation, even though It was not.

A

Anonymous_

You should get a better idea of the procedure after looking at the worksheets in the IRS publication at the link below.

https://www.irs.gov/publications/p527#en_US_2023_publink1000285479

PatriciaV

Passive losses, like excess rental expenses, are carried forward to future returns. Once you have net rental income, the losses will be applied to offset that income. As long as you use TurboTax, those carryover losses should transfer to next year when you start a new return.

Your assets continue to accumulate depreciation, even though you weren't able to deduct the expense in the current year. This difference will be eliminated in time when the property begins to be profitable.

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A

Anonymous_

If you rented the property and also used it as a residence during the tax year, your net gain or loss is not subject to the passive activity rules of Section 469.

See https://www.irs.gov/publications/p527#en_US_2023_publink1000219123

Your deductions and loss, however, may be limited by Section 280A.