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If your Schedule K-1 is showing unallowed prior year losses and current year unallowed losses in Box 2, but prior year unallowed losses are not showing on Form 8582 Passive Activity Loss Limitations, you have most likely indicated an amount in Box 1 as nonpassive and an amount in Box 2 as passive on the same K-1.


Per IRS Instructions for Form 8582, page 9:

Column (c). Enter the prior year unallowed losses for each activity. You find these amounts on Worksheet 5, column (c), of your 2020 Form 8582. Enter the total of column (c) from your 2021 Worksheet 1 on line 1c of Form 8582.


To get this to work in the TaxAct program (if you need help accessing Schedule K-1, go to our Schedule K-1 - Entering FAQ):

Schedule K-1 for Form 1065 (Partnerships)

  1. From within your Schedule K-1, continue with the interview process until you reach the screen titled Partnership - Prior Year Losses, then click Yes.
  2. On the screen titled Partnership - Prior Year Unallowed Losses, enter the prior year unallowed losses.

Schedule K-1 for Form 1120S (S Corporation)

  1. From within your Schedule K-1, continue with the interview process until you reach the screen titled S Corporation - Prior Year Losses, then click Yes.
  2. On the screen titled S Corporation - Prior Year Unallowed Losses, enter the prior year unallowed losses.

You should now see the amount transferring to Form 8582 as expected.


Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.


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