Thanks for replying!
I was a bit unclear in my question. In my specific case, the tenant was evicted, he owes significant amount, I'm suing him and expect to recover some money in the next year or two. I just sold the property and will no longer have any property by the time I recover the money.
My suspended PAL, which accrued while the tenant was still in the apt., exceeds all my other gains, including recap depr., so big part of the PAL will be wasted. Yet, when the recovered money comes over the next two years, it will be fully taxable. Is there a solution for this?
As for the future expenses, I'm likely to have legal costs in 2023, when there is no more rental property, but receive the payout in 2024. Both, the expenses and the payout are clearly the part of the rental activity, but because I won't own the property, it looks like I won't be able to deduct the 2023 expenses, while I will have to pay full tax in 2024 on recovered amount. Is there a way to apply carry/suspend/apply the 2023 expenses against 2024 income, since those two events are linked to each other?
Thanks a lot for your help!
