A question unknown is never considered in that category.
Passive losses are generally deductible only to the extent of passive income. However, current and suspended losses are fully deductible if there is a “qualifying disposition.” Under IRC § 469(g), a “qualifying disposition” requires three criteria:
1. Disposition of an entire interest (or substantially all[1])
2. In a fully taxable event (where all gain/loss is realized and recognized).
3. To an unrelated party.
If these three tests are met, losses are fully deductible against non-passive income (unless the taxpayer has basis limitations). Thus, in the year of disposition, losses allocable to the passive activity may offset portfolio and other investment income or may become part of a net operating loss."
However if IRC Section 121 applies [home exclusion ] When you sell the property, you might qualify to exclude gain on the sale. If so, the sale isn't a fully taxable transaction. So, you still won't be able to use the suspended passive-activity losses.
