Thank you for your reply.
So, there are three rental properties total. One rental property was sold at a gain. The current and suspended loss for that rental property appear to have flowed through as expected because that property no longer appears anywhere on the 8582 at all, even though it does appear on the 8582 when I remove the "sale" just like with prior years.
But I have read in several places that the suspended passive losses should be released for the other two properties, since they were not "bundled" and have always been listed separately in the Schedule E. Hall CPA (a Bigger Pockets person) and several others claim that all suspended passive losses for all rental properties should be released in the year of selling any single rental property.
I'm assuming that I should not and can not check the "sold" checkbox for the properties that did not sell, right?
Also, I am trying to determine whether it would be wise to invest in an LLC that would provide operating losses in Box 1 of the K-1 for the year. I don't believe there would be a tax advantage for me to do this unless it would offset the ordinary income that is due to the sale of this rental property.
So I have two questions -
- Is it correct that the suspended passive losses for all the properties should be released, or are all these videos and blogs incorrect?
- And would investing in the K-1, which would generate additional passive losses to the best of my understanding, also offset the gain? I'd like to invest in the LLC and receive the K-1, but only if it is correct that it would offset this gain.
