It sounds like you did, but just to confirm, did you check the sold box where I told you?
And as I asked before, was the gain at least as much as the total Passive Losses (current and carryover)?
- 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.
Sort of. They are not directly released due to the sale of a different property. However, Passive Losses can be used to the extent that you have Passive Income, so they can potentially be used if you have Passive Income.
Because you sold the one passive rental at a gain, you now have Passive Income. Because you have Passive Income, some (or all) of the Passive Losses can be used (that is why I asked about how much gain you have versus how much losses there are). But if your losses are more than the gain, the remaining losses will continue to be suspended until you have Passive Income or that property is sold.
