Wholesaler · Sugar Land, TX · Member since 2013 · 49 posts · 7 votes
My real estate wholesale business had a loss of over $8K in 2013 and I was/am not a RE professionals regards to IRS terms. I had profit in 2014 for wholesaling of over $15K. Could the 2013 loss be carried over to 2014 and offset some of the gains?
Eve W. As a wholesaler you would have been classified as a dealer for ax purposes, meaning your houses are inventory and you should have reported your income and expenses on schedule C.
Your schedule C $8k loss should have flowed through to your 1040 and decreased ultimately your taxable income.
You can carry forward your sched C losses of your 1040 income goes negative.
I think you should look at amending your 2013 return.
Eve W. As a wholesaler you would have been classified as a dealer for ax purposes, meaning your houses are inventory and you should have reported your income and expenses on schedule C.
Your schedule C $8k loss should have flowed through to your 1040 and decreased ultimately your taxable income.
You can carry forward your sched C losses of your 1040 income goes negative.
I think you should look at amending your 2013 return.
Thanks Brandon, I use Turbo Tax business, I think it considered $8K loss in my 2013 taxable income when calculated the taxes. And I can see the $8K loss in my Turbo Tax.
However, I don't see the loss being carried over this year, how much could it offset my income? Is there a limit for loss carryover? Does the loss carryover get phrased out with AGI over certain threshold? thanks
@Eve W. What I'm saying is that the $8k loss should have offset income last year and none should be carried over into this year.
If you had $10k income in 2013, the $8k loss would have decreased your taxable income to $2k. Nothing is carried over into future years unless your taxable income goes into the negative due to the loss (can't have negative taxable income).
Passive activity (and the respective loss threshold) is a non-issue since you weren't running a passive business.