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tax__beginner
New Member

I've rented out a property w/ a property manager for the last 7 years. I manage it now; how does the active/passive loss work now and how will it affect me when I sell?

I'm anticipating selling the house for around 15,000 less than purchase price (bought in early 2007). I'm hoping to sell the house within the next year, so I'm not sure if previous passive losses (around $20,000) will still carry over and apply upon the sale of the house. On that note, should/can I claim this years losses as passive? 

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Accepted Solutions
Coleen3
Intuit Alumni

I've rented out a property w/ a property manager for the last 7 years. I manage it now; how does the active/passive loss work now and how will it affect me when I sell?

Yes, your passive losses will come into play in the sale.

Any disallowed rental loss is carried forward to the next year along with all previous years' disallowed losses. Those can be applied to any subsequent passive income from that rental and are completely released for deduction upon sale of the property.

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1 Reply
Coleen3
Intuit Alumni

I've rented out a property w/ a property manager for the last 7 years. I manage it now; how does the active/passive loss work now and how will it affect me when I sell?

Yes, your passive losses will come into play in the sale.

Any disallowed rental loss is carried forward to the next year along with all previous years' disallowed losses. Those can be applied to any subsequent passive income from that rental and are completely released for deduction upon sale of the property.

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