USA form 8582 not generating ; Switch to paper return? Even with residential rental actively participate

[poopingninja]

Hello,
I have filled out information for first half-year ownership of Single Family Residence with 4 bedrooms of which 3 bedrooms are rented out immediately upon acquisition to separate tenants with separate leases by me (craigslist - ads and leases drawn up by me) and I lived in one room - calculating as 25% personal use and 75% business use for schedule E. Or was this not correct for my situation?

From acquisition at end of June through end of year I had approximately $8,300 in rents and approx. $15,000 in allocated 75% of repairs/expenses (fixer upper) for the property/rental.

Per IRS publication 527 chapter 3 (http://www.irs.gov/publications/p527/ch03.html); There appears to be a wonderful EXCEPTION for rental real estate with Active Participation to where I can allocate up to $25k losses to nonpassive income (my gross income <$60k).

Isn't it form 8582 that I can claim the extra losses against nonpassive income?

However on my online program (TaxACT) form 8582 doesn't seem to trigger at all. The schedule E for some reason doesn't show the $15,000 in expenses but instead converts to amounts so it may just total to whatever my income was, ie expenses of $8,300. And there seems to be no indication of any loss carryforward, nor questions relating to me being Active on the property. The only thing that came up was asking days of personal use and days of business use of which I put in 44 days and 180 days respectively. Should I look elsewhere in entry to change on the program? It seems to see it as vacation because of personal use as if the exception with active participation doesn't apply.

Shouldn't the Active Participation exception apply in my case since I spend plenty of time vetting tenants, advertising, running reports, executing leases, fixing repairs, and hearing their complaints for the majority of my property Single Family House (also my only and primary residence)?

If I convert to paper, would I just adjust schedule E to the actually allocated 75% of expenses and show the loss and fill out form 8582? Is there another form also I should be doing or adjusting?

Any guidance, help or tips?

Thank you in advance for any comments!!! =)

 

[poopingninja]

Just as an update for anyone else curious : After reading more and more examples listed by IRS and digging as deep as I could from others via google, it appears I do treat the rental portion separately as I, nor any of my friends or family made use of those areas at all and where exclusively rented to outside tenants at FMV. I changed the allocation days of usage accordingly (rental use and personal use).

Also, my allocation of expenses for the 3 out of 4 is too aggressive and not conservative thus I should definitely change it; instead I would need to apply square footage method instead as the common areas like living room and kitchen were common and not exclusive for rental use only, I have changed allocation % of expenses accordingly.

The remaining question which I will likely have to consult with a tax professional is although individually the many repairs I may have done were small to fixes for rental use, as an aggregate, $15,000 initially incorrectly allocated ($20,000 actual expense) may seem so large that it may need to be instead treated as a home-improvement-cost basis increase and depreciated accordingly instead of repair expense.

What do you think? These included water heater going bad. Purchasing a gas stove (there was none), purchasing and installing washer and a dryer. Fixing plumbing pipes that were stolen so house and tenants can have water. Staining floors that looked hideous to any prospective tenants prior to completion. Fixing electrical issues. Labor and materials of which I have all receipts for.

Again any comments appreciated.