@Anonymous_ wrote:
Can the foregoing scenario result in an NOL? Under the circumstances set forth, the loss is not subject to the passive activity rules?
I'm a bit lost on exactly where this conversation has gone, but ...
I've seen you say that the $25,000 real estate loss can't create a NOL, but I'm not familiar with that rule.
§469 allows the loss. But I'm not familiar enough with the detail of NOLs to positively know how the interaction works.
If you are going with the thought that the rental is not a "trade or business" (it is a "nonbusiness deduction" and therefore can't create a NOL), I don't know. For some purposes, a non-§162 passive rental is considered as a "trade or business" (or example, §1231 gain/losses, and is reported on 4797, and a loss from the sale of a rental is not subject to the $3000 limit). But in other cases it is not. I'm not sure how it applies to NOLs.
