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Investors & landlords
Yes, it is a question of terminology and application of tax law. You have passive activity losses, PAL, carried forward. The sold property A uses all of its PAL to try and eliminate gain. If there is still a gain, other PAL may be used. The other PAL could be from multiple sources, including property B. Any PAL not used will be carried forward.
Here is a case study if interested.
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March 31, 2021
2:40 PM