Question

Passive losses in year of disposition. No ordinary income or passive income to offset agaisnt.

Forum|Forum|4 years ago
April 9, 2022
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I have losses on the disposition of two rental properties in the same year. There is no passive income, nor is there ordinary income to offset the passive losses for the current year or for next year.

Can I carry the suspended losses forward year-to-year until there is a year with passive or ordinary income?

ColeenD3

Yes, you can carry them forward. The program will do this automatically and enter them on Form 8582.

Any passive activity losses (but not credits) that haven’t been allowed (including current year losses) are generally allowed in full in the tax year you dispose of your entire interest in the passive (or former passive) activity. However, for the losses to be allowed, you must dispose of your entire interest in the activity in a transaction in which all realized gain or loss is recognized. Also, the person acquiring the interest from you must not be related to you.