I have suspended passive activity losses from rental of roughly 2000 after 2015. In 2016, I sold the property for a small taxable gain. I also had a gain from rent.

[standena1]

My rental gain for 2016 is roughly 900.  As indicated above, the suspended passive activity loss is roughly 2000.  The gain on sale of house is minimal (less than 100).  My income exceeded 150K in 2016.  Turbotax is telling me that I can take the entire suspended loss in 2016 - creating a rental loss.  Am I truly allowed to take the entire suspended loss?  Also, my printed 2016 return didnt include a Form 8582 for 2016 to show the suspended passive loss carry forward?  Is this correct?  

Also, I disposed of the entire rental property (my only rental property) and sold it to an unrelated party.

[ChristinaS]

Yes, the Passive Activity Loss rules are lifted when you dispose of the property. So, many taxpayers with income over $150k experience a large deductible loss in the year of sale due to a release of suspended losses. On the contrary, there is also typically a gain on the sale of the property itself.

If this was your only property, you could no longer have a Form 8582 carryover. Its all used up in 2016.

From 8582 instructions:

Disposition of an Entire Interest

If you disposed of your entire interest in a passive activity or a former passive activity to an unrelated person in a fully taxable transaction during the tax year, your losses allocable to the activity for the year are not limited by the PAL rules.

https://www.irs.gov/instructions/i8582/ch01.html#d0e884