Federal 2011: Land Rentals
In general, net rental real estate income and losses are treated as passive activities and the taxpayer can deduct passive losses only from passive income.
However when renting raw land, the net rental income is treated as nonpassive income and the net rental loss is treated as a passive loss.
Certain customers, who had net rental income on raw land for 2011, may have filed an incorrect tax return.
How to tell if you may be impacted
You may be affected if ALL of the following are true:
- You filed a 2011 federal tax return; AND
- You filed a Schedule E for a rental property; AND
- That property was raw land rented to another (property type 5 on Schedule E); AND
- There is net income for that property on Schedule E, line 21; AND
- Your return included other passive activities with a loss or a prior year passive loss carryover.
If you are affected, you may have underpaid your taxes. You may need to amend your federal tax return and your state tax return as well.
You can make the corrections yourself.
- To do it yourself, please follow these step-by-step instructions to amend your federal and state return.
- After you make the changes to your tax return, you will need to mail a copy of:
- Your federal amended return to the Internal Revenue Service and
- Your state amended return to your state tax authority, if your state return is affected.
- Your printed return(s) will include instructions on how and where to mail it.
- If you need assistance, call us at the phone number in the email.
Or, let us do the work for you.
- Please download and print this Authorization Form.
- Complete the form and fax it to us at the number printed at the top of the form.
- A TurboTax representative will review your federal return to confirm if you are impacted.
- If you are impacted, a TurboTax representative will prepare your amended return and contact you when the corrected return(s) are ready to be securely emailed back to you.
- You can print, sign, and mail the corrected return to the Internal Revenue Service and to your state tax authority if your state return is affected.
If you need to contact us, please use the phone number in the email from TurboTax and tell the representative you're calling about Federal 2011: Land Rentals.