How to fully deduct suspended passive loss? Do I have to sell all rental properties in the same year? What to deduct with? Income, capital gains, depreciation recapture?

If you made the election to group all of your rental activities as one activity after January 24th, 2010, then all rental properties are considered one activity. If this is the case then you have not disposed of your entire interest which limits the passive loss deduction until full disposal.

• New grouping. You must file a written statement with your original income tax return for the first tax year in which two or more activities are originally grouped into a single activity. 

Grouping is important for a number of reasons. If you group two activities into one larger activity, you need only show material participation in the activity as a whole. But if the two activities are separate, you must show material participation in each one. On the other hand, if you group two activities into one larger activity and you dispose of one of the two, then you have disposed of only part of your entire interest in the activity. But if the two activities are separate and you dispose of one of them, then you have disposed of your entire interest in that activity. 

There are many questions that you have relating to the various options, choices and requirements.  This is detailed and complex information so I will provide the publication link for you to review several options, such as disclosure requirements as well as regrouping options. Publication 925-Passive Activity Rules

If you have not carried the unallowed passive losses consistently on your tax returns they will be lost.  You can go back as far as 2014 (due April 15, 2018) to complete the correct carryover losses that were unallowed. Then correct each return going forward.  This will allow you to have the correct amount on your 2017 tax return.

• Options and/or requirements: 

1. Amend the tax returns for 2014 forward to capture the unallowed losses.
2. Regroup your initial grouping election. A statement must be attached to your return for the year of the change.
3. Complete any required disclosures if necessary.

Thanks for your input. May I just ask if I need to sell grouped rental properties ex two of them in the same year, ex 2018 to be able to carry over the loss back to 2014? What if I sell one in 2018 and one in 2019?

@leslei99 Of course! The unallowed losses are always carried over until there is enough income to use it up or the properties are disposed of.  The purpose of doing the amendments is that if you want to use the unallowed losses in the year of disposition then you have to have the record carried forward every year  so that the IRS can see the losses.  They will place the burden on you for not reporting it and may likely disallow it in any current or future year unless  it's corrected on the amendments and carried forward.
If you think that you will have properties sold in two different years, that means you will want to consider doing a regrouping or wait to use the unallowed losses when the last rental is sold. You can regroup the rentals on the 2017 return by using a statement starting on page 9 of the publication. You would mail your return to include the statement with the return. I hope this helps answer the most important questions for you.