Investors & landlords

If you are making a complete disposition of that passive activity, please review the instructions for Form 8582 and look under dispositions.

Instructions for Form 8582

https://www.irs.gov/pub/irs-pdf/i8582.pdf

 

This is a copy and pasted example from the instructions for Form 8582

 

Example 1. Activity with overall
gain. You sell your entire interest in a
rental real estate activity in which you
actively participated for a gain of
$15,525. $7,300 of the gain is section
1231 gain reported on Form 4797,
Part I, and $8,225 is ordinary recapture
income reported on Form 4797, Part II.
On line 22 of Schedule E (Form 1040 or
1040-SR), you report a total loss of
$15,450, which includes a current year
$2,800 net loss and a $12,650 prior
year unallowed loss. You have an
overall gain from the disposition
($15,525 – $15,450 = $75).
Because you had an overall gain, you
make the following entries on
Worksheet 1. You enter the $15,525
gain on the disposition in column (a),
the current year loss of $2,800 in
column (b), and the prior year unallowed
loss of $12,650 in column (c).

 

For more information, review Pub 925 and look under dispositions.

 

https://www.irs.gov/pub/irs-pdf/p925.pdf

 

**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**