Passive Loss --> Filing Requirement?

[gauss]

Will I loose any (suspended) passive losses from rental real estate if I do not file a tax return for that year if I otherwise do not have a filing requirement?

Thanks
-gauss

 

[kaneohe]

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.......

 

[gauss]

Makes sense.

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.

-gauss

 

[kaneohe]

You could try asking at the fairmark.com forums to see what opinions surface.

 

[kaneohe]

Don’t let your tax attributes die with you | Plante Moran

Found this:

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.

and this: https://www.aicpa.org/InterestAreas...uments/20140723-PassiveActivities-Outline.pdf

which appears to say something similar.