capital gains on a rental property

[mlamontana]

I had an uninsured loss to a property of $33,000 in 2006. I sold the property last year. Can I deduct the loss from the sales amount if the loss was never depreciated?  (It was paid to a disaster restoration company)

[ColeenD3]

If you already took the expense, which you probably did the year you paid the company to do the repair, then no, you can't deduct it again.

[mlamontana]

 What about the unallowed losses due to maximum amount being exceeded?  Can they be claimed?

[PattiF]

Yes, the unallowed losses can be carried forward from prior years. The losses can be used when you sold the property in 2021.

Rental property passive losses that are not deductible right away are called suspended passive losses. These deductions are not lost forever. Rather, they are carried forward indefinitely until either one of two things happens:

• you have rental income (or other passive income) you can deduct them against, or
• you dispose of your entire interest in the property.

If the Carryover real estate losses have not been included in your return since 2006, they can be entered in the Property Profile section of the rental information for the year of the sale.

To access the rental section of TurboTax: 

1. Locate the Search bar in the upper right of your screen. Search for rentals and select the Jump to link at the top of the search results
2. Answer Yes to the question Did you have any income from rentals or royalties?
3. On the next screen, What are you here to report?, select Rentals and Continue
   • If you have more than one rental property to report, no problem—just start with one, and we’ll come back to the other one(s) later
4. On the following screens, we'll ask you to enter all the info we need about your rental property, including a description of the property, your rental income, any expenses and assets, and other less common situations about your rental
5. When you reach the Here’s your rental property info screen, double-check the info you entered to make sure everything is accurate and that you haven’t left anything out