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Investors & landlords
Passive unallowed losses on the Sch E becomes a deduction on the Sch E in the year of sale ... it doesn't show up on the form 4797 or the Sch D ... that is where the depreciation recapture happens. So the amounts technically balance themselves off in the year of sale so you don't "pay taxes twice". When you are done review the amounts carefully to see how they work in harmony.
‎July 26, 2020
1:32 PM