Investors & landlords

whe you fully dispose of rental real estate in a taxable transaction the passive nature is gone. any suspemded passive losses will be allowed as non-passive. even the loss on sale is not passive. it should flow to form 4797 and from there to line 4 of schedule 1.

 

 

so if you sell the property in a year before receiving the final rent, I would treat the rent as nonpassive - other income.