I have a married couple client who live in Canada. I have been using TurboTax to file his tax returns for him since 2010. He has a condo in Hawaii. He rents it out and he also lives there on occasion. He has a rental property company take care of it for him. I checked off the boxes to state that he is not a real estate professional (he is actually a lawyer). They only file the 1040 for only the rental property in Hawaii and that is there only tie in with the USA for tax reporting.
I just noticed that he does not have any passive loss carry forwards show up on his TurboTax summary in the Schedule E. He has made a loss every year since 2010 until now. I looked at copies of his past 1040's and it shows a full loss on the first page of the 1040 (it is a negative number in the Line 17) when there should be a zero (if the loss carryforwards worked properly).
Is there something that I did not click off on to let TurboTax know that his losses should be passive and NOT active losses? What do I need to do now to fix all his losses that appear on his 1040 to be passive losses?
Thank you in advance for your help everyone.