"don" <dc[at]gmail.com> wrote in message
news:5fcqt4l1a4kcdhh771vqll0hku37urntku[at]4ax.com...
- quote -

I'd be surprised if anyone here is able to answer this for you. Without
actually seeing what you've entered in your software, and with the caveat
that I don't use either TT or TC so I'm not familiar with how they work,
you've either checked some box that you shouldn't have or not checked some
box that you should have.

The two programs are treating the K-1 differently because they SEE them
differently. Likely one of them is marked as a PASSIVE activity and one is
not. Without knowing more about your wife's involvement, I have no idea
whether she is a passive owner or not, but this matters - A LOT!

Pros familiar with Section 469 (?) passive activities have a saying - If you
have PALS, you NEED PIGS!

PALS = Passive Activity Losses
PIGS = Passive Income Generators

Passive losses can only be deducted against passive income. If your wife is
considered a passive owner in this venture her losses will only be allowed
against passive income. AND BTW - interest, dividends and portfolio income
is NOT passive income, not in this sense.

You mentioned that your wife and the others select the renters, so nearly
all the maintenance and PROVIDE FURNISHINGS. This last items concerns me
greatly and it should concern you. Is the rental a long term rental or is
it a resort/vacation type rental where the average rental period is 7 days
or less? If its a resort type rental it gets treated WAY differently that
if it is a long term type rental. If this is the case, then being an active
member may not be enough - she would need to MATERIALLY participate.

You didn't say what line from the K-1 the loss is reported on, and quite
frankly even if you told us it may not help us answer your question
accurately. Keep in mind that the advice you get here, especially from the
pros, is the best available under the circumstances BUT you cannot rely on
it as substantive authority - essentially, you get exactly what you pay for
here.

You also need to be tracking your wife's BASIS in this enterprise. The
other thing that will limit her ability to deduct losses. Once she has
deducted losses that total her basis in the activity, even if she is NOT
passive, her future losses will be suspended until her basis increases.

A lot of people are involved in activities like this and the vast majority
of them have no idea how to deal with PASSIVE activities and even more have
no idea what BASIS is, how its tracked or what it means.

The best thing you can do now is file an extension and make an appointment
with a local pro who understands Passive Activities. Make sure to tell them
that you have a K-1 from a rental.

Good luck,
Gene E. Utterback, EA, RFC, ABA

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On Mon, 6 Apr 2009 11:53:26 EDT, lotax[at]hotmail.com wrote:

- quote -

Thank you for your prompt response.

The K-1 (form 1065), prepared by the LLc's CPA, lists my wife as an
LLc member; and Domestic partner. The Type of entity this partner is:
Individual.

The specific form where TC and TT differ is Schedule 1K-1 worksheet,
section A. There the passive activity adjustment to Income (or loss)
is recorded. Tax Cut transfers the losses associated with the LLc to
column C - which is net Income (Loss) ALLOWED. With TC, the LLc loses
further appear in form 1040, line 17 (Rental real estate, royalties
..... ) with a value of (1,981).

Turbo Tax disallows the LLc losses, with the LLc data appearing in
Schedule 1K-1 worksheet column (d) - which is Loses SUSPENDED for
current year. On form 104,0 line 17 the value is $0.00 (vs -$1,981
with TC).

The difference between how TC and TT treat the LLc has me baffled,
which is correct?

Thanks again for your time and consideration of my question.

dc

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 6, 10:40�am, don <d...[at]gmail.com> wrote:
- quote -

Tell us on which form in your tax return the loss was limited and
we'll be better able to identify what you did differently between the
two softwares.

Did you identify your wife as a limited partner in this LLC?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I often find valuable advice to others, today I would like some advice
on my situation.

My wife, along with 4 siblings, jointly owns a LLc that consists of a
single rental house. My wife (and her siblings) are active members -
ie they select the renters, do nearly all of the maintenance, provide
any furnishings needed etc.

My question is how to file our taxes. To (hopefully) preclude any
filing error - I tentatively fill out our return using both Turbo Tax
and Tax Cut.

After the TC tax prep interview, the LLc resulted in loses on K-1
worksheet (Section A, column C) that are allowed. I am unaware of how
my interview answers differ for TT, but there the LLc loses are
"Suspended for Current Year" (Section A, column D). Clearly I would
prefer the loses to be allowed, but is that a proper declaration?


Most appreciative for any guidance.

dc

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >