All your suspended passive losses are released upo...
Level 7

Investors & landlords

All your suspended passive losses are released upon sale of the rental, not just those for the property you sold, assuming you have sufficient gain from the sale.  And since passive losses are ordinary income equivalents (they would have been treated as a reduction in ordinary income if they hadn't been suspended), they are treated as a reduction in ordinary income when released.  They are not treated as a cost basis adjustment.
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