I am using TurboTax and I have a form 8582 Passive Activity Loss Limitations wherein I have a positive value on line 16 that represents a passive loss from real estate activities. The form itself states on line 16:

... See instructions to find out how to report the losses on your tax return.

I went to the instructions for form 8582 and see nothing helpful:

Line 16. Use the worksheets on Form 8582 and the following instructions for those worksheets to figure the unallowed loss to be carried forward and the allowed loss to report on your forms and schedules for 2013.

Then later in the instructions it states:

How To Report Allowed Losses

Line 16 is the same as the total of lines 1b, 1c, 2a, 2b, 3b, and 3c. In this case, all the losses in columns (b) and (c) of Worksheets 1 and 3 and all the deductions in columns (a) and (b) of Worksheet 2 are allowed in full. Report the income and losses in columns (a), (b), and (c) of Worksheets 1 and 3 and deductions in columns (a) and (b) of Worksheet 2 on the forms and schedules normally used.

But the end just says the unhelpful: "...on the forms and schedules normally used."

I'm concerned because using Turbo Tax, I do not see the loss showing up anywhere on my 1040 so I'm not sure if I've done something wrong or perhaps there is a bug in the application.

Where should I expect to see this loss reflected in my tax return?

  • 1
    In general, passive losses are deductible against passive gains, if any. Anything left over is carried forward (that is, not deducted on the current 1040) and remain in limbo until the property is sold or the limited partnership is terminated. At that point, all the gains and losses are settled. Thus, your passive losses that you are adding up so carefully will get deducted from the gains, if any, on a later-year return. Mar 22, 2014 at 2:54
  • @Dilip why don't you write it as an answer?
    – littleadv
    Mar 22, 2014 at 6:19
  • @littleadv Because jonsca's answer has all the details that I did not remember when I wrote my comment: my last dealings with Form 8582 and Schedule E were about ten years ago. Mar 22, 2014 at 12:42

1 Answer 1


The allowable loss is going to show up on Schedule E, Part I for your real estate activities:

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The total from the last line gets transferred to line 17 of the 1040 or if using page 2 of schedule E then in the sum included on line 41.

Depending on whether you have any income from pass-through entities it can show up here in Part II of that schedule (and in the similar section in Part III for trusts):

enter image description here

Keep a copy of the 8582 handy, as you are going to need it for next year's 8582. If you use the same tax software, the numbers should carry forward, but it never hurts to be sure.

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