Yes, the passive losses for 2017 would be applied to the gain from selling the rental property, along with any other carryover passive losses you were not able to deduct earlier.
Here's some info about selling property at a loss:
https://turbotax.intuit.com/tax-tips/rental-property/selling-rental-real-estate-at-a-loss/L2RKgClm4
As far as MA is concerned, from looking at the MA Dept of Revenue site, it is handled in much the same way as in the Federal Return.
You should see the amounts flow through from the Federal portion to the MA return.
Here's a link to the MA DOR you may find helpful:
https://www.mass.gov/service-details/learn-about-capitalordinary-gains-and-losses
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