Hello all,
We have a situation where our tenant owes us $20k in back rent during the time they rented our condo. We finally had them move out this month. We will sell the condo this or next month. We also had the tenant sign an agreement to pay down what they owe in 2024. We do not have an LLC for this transaction, just regular landlords. Our carry-over unallowed losses line over the years for this condo shows up as $17,380 on Form 8582.
My question is, how do we report this future passive income (backpayment) after we sold the condo? Is there an "other passive income" option when filling out the schedules, or do we need to somehow tie this income to the condo that we owned and rented out? I want to make sure that we do not get flagged for claiming the passive losses in future years (we do not / possibly will not have passive gains to offset these losses) as we are hopefully getting paid for this back rent. I keep hearing about bad debt but I am not sure if this qualifies for that.
To add, we'll be selling this condo at a $30k loss (compared to the sale price), which is going to be another topic fo passive losses I suppose? Is that another item that needs to be handled separately from above?
Thanks.
