A partnership we owned an interest in was sold creating a capital gain. We had enough capital loss carryforward from prior years to absorb the gain. We also had suspended losses from this partnership that were freed up due to the full disposition of the asset that were in excess of our total income for the year.
Example:
Total active income $100,000
Capital gain $50,000
Capital loss carryforward ($50,000)
Suspended losses freed up ($150,000)
AGI ($50,000)
Since applying all suspended losses creates a negative AGI, does the full amount have to be applied to this year or can the $50,000 excess be carried forward to offset future passive gains?
