Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
gauss, I don't know the real answer to your question. However I think I know that if I do file, I won't lose them. To me, the effort to file and document the losses is a small price to pay for preserving those passive losses. Kind of like arriving at the airport early to be sure you get on the plane instead of arriving later so as not to waste time at the airport.
....but then, I'm a worst case analysis kind of guy. ymmv.......
In my case we are talking about a 1041 return for a decedent's estate with relevant years being only 2014 and 2015.
The property was disbursed in 2015 and the beneficiary will not be able to continue to roll the suspended passive losses forward but can add them to the basis of the property when setting up the depreciation -- if I understand this correctly.
Being both Executor and Beneficiary in this case tends to muddle things and encourage short-cuts.
In addition, under IRC Section 469(g)(2)(B), when a taxpayer who owns an interest in a passive activity dies, suspended passive activity losses generally are allowed on the decedent’s final income tax return. The amount of the suspended losses from the activity allowable to the decedent by reason of this disposition is reduced by the step-up in basis to the fair market value of the interest at death under IRC Section 1014. The release of these suspended passive activity losses could also increase a taxpayer’s NOL. Generally, a taxpayer may carry back his NOL two years or forward twenty years; only the 2008 and 2009 tax years provided opportunities to carryback an NOL for more than two years.
This community was started in 2002 as an alternative to a then fee only Motley Fool. The focus of the discussions is on topics related to early retirement and financial independence. The community is moderated to ensure a pleasant experience for our members.