Yes, you can carry the passive losses to other passive activity income properties.
- You can only deduct suspended passive-activity losses in two situations:
- Against passive-activity income (your other rental activity when there is a positive income)
- When you dispose of the passive activity in a fully taxable transaction to an unrelated party (a future sale of property A)
When you converted rental property into a personal home.
The rental home had suspended passive-activity losses. You can continue to deduct the suspended passive activity losses from other passive income. If you have no other passive income, the suspended losses remain suspended. Carry them forward until you sell the home in a fully taxable transaction (noted above).
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