Not capturing passive suspended loss

Forum|Forum|1 year ago
April 3, 2025
1 reply
0 views

Property A and B both have Passive Suspended loss from previous years. I sold A in 2024. TurboTax not capturing the passive suspended loss on both properties. It is only deducting Property A suspended loss. I heard that if you sell one property, you can take suspended loss from all rental properties. How do i do that in TurboTax?

Mike9241

you heard wrong. if you don't aggregate properties (treat them as 1 unit) the PAL is released only on the property that is sold in a fully taxable transaction (a 1031 exchange would bar recognition of the PAL). If you aggregated (meaning you treated both properties as 1 unit) then none of the PAL is released until both properties are sold in a fully taxable transaction.

However there is an exception: some or all of the PAL on property B may be released if there is active participation and your modified adjusted gross income is $150K or less see form 8582