Rental Property converted to 2nd home

Forum|Forum|3 years ago
June 21, 2023
1 reply
15 views

I have a client who has two rental properties. The first is a long term rental that generates about $5k of income per year. The 2nd is a short term vacation rental that has a suspended loss of about $30k still on the tax return. The client is going to stop renting it and convert it to a 2nd home.

My understanding is the $30k suspended loss can remain on the tax return even though the home is being converted to a 2nd home. Where in Proseries does this $30k suspended loss get entered so that it remains on the return going forward? I was planning to remove the SCH E since it's no longer rented. Maybe I can just remove the asset cards so no more depreciation is reported going forward and leave the suspended loss on the SCH E? or?

Thanks!

ProSeries Professional

This topic has been closed for replies.

Best answer by TaxGuyBill

@bryce wrote:

is a short term vacation rental that has a suspended loss of about $30k still on the tax return.

Where in Proseries does this $30k suspended loss get entered so that it remains on the return going forward?

Are these Passive Losses?

So the taxpayer did not Materially Participate in that rental? If there was Material Participation, a short-term rental would usually not be passive.

In answer to your question, ProSeries is negligent in this regard, and you can't do it. You either need to not file the 8582 (which is wrong), or continue to file a fake rental property (which is also wrong) in order to include the 8582 for the property.

T

TaxGuyBillAnswer

Level 15

@bryce wrote:

is a short term vacation rental that has a suspended loss of about $30k still on the tax return.

Where in Proseries does this $30k suspended loss get entered so that it remains on the return going forward?

Are these Passive Losses?

So the taxpayer did not Materially Participate in that rental? If there was Material Participation, a short-term rental would usually not be passive.

In answer to your question, ProSeries is negligent in this regard, and you can't do it. You either need to not file the 8582 (which is wrong), or continue to file a fake rental property (which is also wrong) in order to include the 8582 for the property.