I sell property A at a gain, it's not passive income therefore I can't use the suspended losses I built up from property B. It is a capital gain so you cannot use passive losses against it.
I sell property B at a gain or loss, all the suspended losses on property B get released. Once you sell the property it releases all the carryover losses on it ... they are reported on the Sch E and the cap gains on the Sch D.
