Sale of Rental Property

[Steve M]

Client's rental property was forclosed on. He did not receive a 1099c so he is still liable for the mortgage. However his fair market value is much lower than his purchase price. In essance, he has a substancial loss, plus prior unallowed passive losses. Instructions for form 8582 state that if you have a complete disposition, not to use form 8582 and to show the entire losses including prior unallowed on 4797. My question is how do you show that on 4797. There is no place to add in prior years losses. Do you subtract them from the FMV? Also 8582 automatically populates the info for the property. Do you remove it manually from the worksheets?

Appreciate your reponse and help.

Steve M

[kcjenkins]

If you go to the asset entry form, and go to the disposition tab, it should take that to the 4797, automatically, with the info. You don't need the 8582 when it is a total disposition, because the loss is no longer limited. And checking the box at the top of the E for total disposition should bring the suspended loss over.

[Steve M]

If you go to the asset entry form, and go to the disposition tab, it should take that to the 4797, automatically, with the info. You don't need the 8582 when it is a total disposition, because the loss is no longer limited. And checking the box at the top of the E for total disposition should bring the suspended loss over.

Thanks for the response KC. I never noticed the box at the top of Sch. E before. There are so many features in the software that most of us don't know about. Thank you for letting me know.

Steve M