Vacation home and prior passive losses
In the past, TP rented out home and created passive loss carryovers. This year, they moved into the home BUT rented out a room 100% of the year (so falling under the vacation home rules). I’ve got most everything working properly EXCEPT that Lacerte is allowing the prior passive losses to offset the current income renting the room generated. I am getting a diagnostic telling me that the passive activity rules do not apply this year, instead it’s the vacation home rules -- great, we agree. What I cannot figure out is how to not show the income on the 8582 BUT still show the prior year losses, which I believe is appropriate. I’ve tried reporting as a nonpassive activity (which seems the most appropriate since that indeed is the case here, but that doesn’t seem to have any effect, even though that’s what it’s supposed to do). I’ve got number days rented and number personal use days both at 365 -- since they are renting a room this is correct. Anyone have any thoughts? I’d appreciate it!
