Suspended losses

[Kram BergGold]

My client was married from 1999 through 2006. In 2000 she inherited a rental property.
Due to high income all losses from 2000-2006 were suspended. In 2007 she was divorced. The person who did the 2007 return for her omitted the suspended losses. As the rental house was totallly owned by her I think the 7 years of suspended losses should be shown on her 2007 return where she filed as single. Any one disagree?

[Corduroy Frog]

Agree

The preparer may have had no knowledge of the prior losses. I'm assuming the total phase-out beginning at $75K is what you speak of - typical Form 8582 stuff.

From what you tell me, it is likely that there is a large stockpile of these losses. What you did not tell us is whether she had a rental loss in 2007 and whether it was also disallowed.
It's possible there would be no effect on Schedule E, but Form 8582 and the required support should have been filed to empower the next preparer to be cognizant of these losses.