Carry back or forward loss from sale of real estate

[Rud Sev]

Hello,

I sold 2 properties at a loss in 2023, and one property for a small gain in 2023. When looking at my tax return from my CPA, the losses and gains show up on Form 4797 (Part I for the losses and the gain in Part III).

I noticed that the loss from Part I was shown on schedule 1 line 4. and helped zero my taxable income in Form 1040 line 15 (I had a negative total income on line 9 and 11). This is great, although it looks like I couldn't use the standard deduction due to the loss. I am having a doubt here, as this seems like active losses from the sale, whereas the property was a commercial rental property held > 1 year. This is my first flag.

My total income is negative, so my loss is greater than this year's income. However, my CPA has a carryover capital loss worksheet for next year which pulls in losses from Schedule D / Form 8949 (sell of stocks), but not the long term capital loss from selling rental income property (on form 4797). This is m second flag. I am also reading the section 1231 regarding net operating loss (NOL) and wonder if the leftover could be carried back on the last 2 years of tax return?

I am unsure if my CPA has: 1) mischaracterized the losses from the sale of my rental income properties, and 2) is missing out (either carry back for 2 years, or future carryover) the loss from the sale. If there is any doubt, I would seek a second opinion but I am unsure if my CPA is wrong in this case, or if I should question further. This may be trivial and I may be missing something simple.

Thank you for your help and guidance.

[Michael Plaks]

@Rud Sev

It's really your CPA's job to walk you through your tax return. Way too much to explain and too little detail shared. And you are not using the correct terms which is understandable but makes it hard for us to respond. So ask your CPA for a walk-through. Then, if you believe he made a mistake, come back here for a second opinion.

Just one comment: you cannot carry anything back. There were some carryback rules in the past but not under the current tax regime.