I have a choice to decide between above two methods as I am filing late. I sold my rental property this year (2017). My CPA is pushing me to file using PAL method for last three years returns. I am concerned that I may be losing out big time as I had major rental losses each year and no other ordinary income. I did pay about $16,000 in income tax in 2012 and 2013 - so I could carry back for those two years first.
Total depreciation taken - $53,000.
Capital Gain - $0.
Total rental losses in 2014-16 amount to $64,000.
Sale of a business use property of my wife also sold in 2017: Long term capital gain = $43,000 and Dep recap = 36,000,
Ordinary income in 2017 = $9,000
Thanks!
PS: I can document that I managed actively.
