Foreign income, US Rental prop loss

[Possi]

My new clients who live and work in Romania have purchased rental property here in the US.

All their earned income is excluded and the Sch E is a loss.

Should I be concerned with NOL and start carrying it over?

Also, the losses are really being lost, as there is no income to offset. When they recapture depreciation (if it ever comes to that) won't they be recapturing a loss that they never realized?

Am I borrowing trouble?

[Rlmea]

Foreign Income, US Rental Property

I had this same situation, and was able to carry back the NOL to 2006, when they had US taxable income. They were able to use it up, and get a nice unexpected refund of their 2006 taxes. All their foreign income was excluded as well.

[Possi]

no need to carry back

There is no need to carry back. All the income is foreign income and excluded, except for some dividends and interest. Not enough to generate a tax liability.

The Sch E is not carrying forward, either. That is why I was wondering if I should be concerned with this, or just file it and "git er done!"