I have 3 rental properties but sold only one this ...
Level 2

Investors & landlords

I have 3 rental properties but sold only one this year. Correct. Schedule 1 line 17 is equal to  Sched.E line 26 which is a difference between total Income Sched E line 24 (all 3 properties) minus losses (from all 3 properties Sched E line 25).  Than, that Schedule 1 line 17 is used to calculate the positive adjustment to income on 1040 line 6 in order to calculate AGI.

I see your point..Schedule 1 line 17 = Capital Gain (Sched D line 16 Short term + Long term)  minus total losses from Sched E, including my carryover passive loses for the property I've sold) . I expected those passive carryover losses to increase the adjusted basis of rental which would lower the capital gain.    

However what puzzles me, Sched. 1 line 17 included the carried over passive losses on rentals I haven't sold yet.  That doesn't seem right.      
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