@timbob99 wrote:
If I have suspended losses as described (due to previous passive loss carryovers and then converting the property from a rental to personal use), wouldn't I be able to use some or all of the suspended losses to offset ordinary income in a later year if my income drops to a level such that I meet the special allowance criteria (i.e. <$150k)?
Form 8582 Line 1c asks for "Prior years' unallowed losses" and nothing I see in the instructions would prevent you from filling that in even if the property has been converted. So my expectation would be to continue to fill out Form 8582 every year after conversion until I'm either able to use the previous years' passive loss OR I dispose of the property in a fully taxable transaction.
No. Line 1, Worksheet 1 and the $25,000 allowance is for rental real estate with Active Participation. You don't have Active Participation.
