Discussion:Lacerte probs w/ nonshelterable passive activities (NOPAs)

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Tax Questions --> Lacerte probs w/ nonshelterable passive activities (NOPAs)


JAD (talk|edits) said:

6 April 2007
Has anyone figured out how to get Lacerte to handle this:

Land rental is NOPA under 1.469-2T(f)(3). Losses are passive, income is not. Income absorbs PAL c/o from this land rental only, does not absorb PAL c/os from other activities.

PAL c/o from land rental in 2005 was $7,000. Net income from this activity in 2006 is $15,000. I want the $15,000 to absorb the $7,000, but none of the carryovers from the other activities.

Has anyone out there figured out a workaround? Thanks.

Szptax (talk|edits) said:

6 April 2007
nope - 1-800-933-9999? I called the other day & the answer was to override with a -1. The calculation was producing a -0- & giving me a critical error preventing efile. You could try a similar override?

JAD (talk|edits) said:

6 April 2007
Thanks, the problem is that part of the income should absorb the existing PAL c/o from that one activity. But the balance of the income is recharacterized to nonpassive. It seems that Lacerte doesn't handle it, I can't figure out how to do the overrides.

WillyB (talk|edits) said:

6 April 2007
How about.. figure exactly how much PAL CF is to be absorbed... 7000 or whatever...

and put in that exact amount of 2006 Passive income. Use overrides to allow only the NOPA 7000 cf to be offset only to the one activity.

Then set up another activity (another business to lacerte) and code it as non passive.. you might have to use Schedule C. I dont know if you can set up a Sch E activity as non passive.

If you have some PALs and some pigs in the other activities.. the overrides could get real ugly. Hopefully all the other passive activies are suspended losses.

good luck.

JAD (talk|edits) said:

12 April 2007
I want to post Lacerte's response in case anyone else has this problem. They said that if we enter between 100 and 500 in the "significant participation detail", the income from the activity will free up PAL c/os specific to that activity. Excess income will not free up losses from other activities.

I haven't tried this yet. Thankfully this return went on extension.

To join in on this discussion, you must first log in.
Personal tools