Passive loss carryover from previous years as a partnership. The partnership changed to a LLC which is a corporation where one is a shareholder. If shares are sold, can I use the passive losses?

Forum|Forum|2 years ago
November 9, 2023
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I have passive loss carryover from previous years as a partnership. The partnership changed status to a LLC (corporation) where one is now a shareholder. If I sell my shareholder shares, may I take the passive losses from the amount shares are sold on the tax return?

Example: Total of years of passive losses = (100), Sales price of shares = 40.

With an answer of (60).

Can I claim a loss of 60 on the tax return the year the shares are sold?

Mike9241

if you completely dispose of all the shares you hold, the entire suspended passive loss is allowed.

A disposition generally occurs if the taxpayer’s entire interest in the activity is disposed of in a fully taxable transaction to an unrelated party (Sec. 469(g)(1)).