Suspended Passive Losses

[Zach Heine]

Hello all! I have a tax return related question for the community. I have invested in a few multifamily syndications since 2018 that provide yearly K1’s. I just now noticed that my suspended losses from prior years was not shown on the last 3 years of tax returns (Form 8582 Item 3c)… This hasn’t been an issue yet as none of the deals have sold, but they may sell soon and this will be a problem where I can’t use the losses to offset the gains. My question is, do I need to amend the last 3 years worth of tax returns to correct this small issue, or can I just input the correct amount on Form 8582 in my 2021 tax return going forward? 

Thanks in advance!

[Holly Chan]

I disagree that an amended return is required to be filed. As long as the losses were factually suspended and your income was correct, the Form 8582 is just a computational form. So while, yes, it should have been included with the return, an administrative error does not mean you lose the suspended loss carryover. You'll need to make sure you have the records to back up the carryover in case they ask.