How to calculate the the "Long-Term Capital Loss Carryover" from the schedule D?

Schedule E vacation home loss- passive, nonpassive issues?

• For the first time in years, my vacation home is 100% rental. I did not live in it at all- it is a passive activity. When I enter the carryover nonpassive vacation home loss into the Schedule E on the vacation home worksheet, my current loss is zero-ed out to equal my income from the rental. However, this year is all rental. Shouldn't I be able to claim a passive loss this year (with only this year's expenses, of course)? If I don't fill out that vacation home limitation sheet, where I enter the carryover info from prior years, I have a loss. If I fill it out, I don't. It's a little confusing. I am thinking that the software is calculating my current year as nonpassive, even though it's a passive year. Is the fact that this property has been personal/ rental in the past going to affect my ability to deduct passive losses? Will I have to wait until the year it is sold? If this seems like a system (TaxAct) glitch, how do I carryover the nonpassive loss with my tax return? Do I just keep the carryover amounts with my records, and not enter into the software? (After all, that form is not transmitted anyway...)

• Answer:

  http://answers.yahoo.com/question/index?qid=20110123095546AAMznWU You seem to have ignored the impact of the $25K PAL limit and IRS publication 925. If it's actually a software glitch, I don't know your software. Call them.