It will depend.
The rental property has taken depreciation over the years which has reduced the basis in those assets. When you sell, you will compute the gain; selling price less basis. This is done for both personal property and real property for the rental.
The general rule is any gain will be recaptured as ordinary gain to the extent of prior depreciation taken. Any gain in excess of depreciation taken will be capital gain. It is only the capital gain component, if any, that will be used to offset your capital loss carryover.
However, you will need to look at the split between the gain on personal property and real property. The gain on the depreciable personal property will be recaptured as ordinary gain (Section 1245 gain) to the extent of any prior depreciation. The gain on real property is what is called "unrecaptured Section 1250 gain". This gain is taxed at 25% to the extent of any prior depreciation taken (versus ordinary rates).
Even if you do not generate any capital gain on the sale of the rental, you will still be able to utilize $3,000 of your capital loss carryover. As you may know, this carries over indefinitely until used.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
