[mljordan37]

Hello, Thanks for any help in advance.

I have a questions about the DPAD deduction. If an individual has a passive interest in a partnership and receives a K-1 that shows a loss, that loss is carried over, unless there is also passive income, due to PAL rules. My question is how is DPAD treated in this circumstance? The software is allowing the DPGR to flow through to 8903 but is limiting the related COGS and allocable expenses to zero and carrying them over due to PAL. What this ends up doing is increasing the individual’s DPAD deduction on page 1 because those limited expenses reduce the DPGR and result in a lower QPAI, which is then multipled by 9% to get the deduction.

Is this how this should work? I have researched it, but all I can find is that the expenses should in fact be carried over, but it doesn’t address what to do with the DPGR.

Thanks again

FAR - 81 Jan '15
BEC - 72, 82 Jul '15
AUD - 88 Aug '15
REG - 92 Aug '15