Question
Final K-1 / Basis Limitation Not Being Applied
Individual owns an interest in a partnership with large passive loss carryover (about $5 million). In 2019, partnership K-1 is final. Partner does not have enough basis to use all of the "freed up" passive loss carryover. Partner has about $1 million in basis. Lacerte is allowing the ENTIRE passive loss carryover of $5 million and is flowing this to Schedule E, Page 2. That can't be right. What are we doing incorrectly? Or how to we get Lacerte to apply basis limit first?
