Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
skywire
Level 2

If passive loss carryover from rental that was converted to 2nd home was not reported each year on 8582, is it forfeited? Even if no passive income incurred since?

 
1 Best answer

Accepted Solutions
Ashby
New Member

If passive loss carryover from rental that was converted to 2nd home was not reported each year on 8582, is it forfeited? Even if no passive income incurred since?

It is not forfeited. You can still carryover as long as there has not been an event where it could have been applied.

You can only deduct suspended passive-activity losses in 2 situations:

    Against passive-activity income

    When you dispose of the passive activity in a fully taxable transaction to an unrelated party

When you converted rental property into a personal home. The rental home had suspended passive-activity losses. So, you can continue to deduct the suspended passive-activity losses from other passive income. If you have no other passive income, the suspended losses remain suspended. Carry them forward until you sell the home in a fully taxable transaction.

View solution in original post

1 Reply
Ashby
New Member

If passive loss carryover from rental that was converted to 2nd home was not reported each year on 8582, is it forfeited? Even if no passive income incurred since?

It is not forfeited. You can still carryover as long as there has not been an event where it could have been applied.

You can only deduct suspended passive-activity losses in 2 situations:

    Against passive-activity income

    When you dispose of the passive activity in a fully taxable transaction to an unrelated party

When you converted rental property into a personal home. The rental home had suspended passive-activity losses. So, you can continue to deduct the suspended passive-activity losses from other passive income. If you have no other passive income, the suspended losses remain suspended. Carry them forward until you sell the home in a fully taxable transaction.

Dynamic AdsDynamic Ads
Privacy Settings
v