Loss carryforwards for a property sold in an LLC

[martin3]

I have a few years of passive activity loss carryovers in a rental property LLC. The property sold last year, but the LLC hasn't closed yet.  Can I deduct the losses now? How do I enter the info or answer the questions to get the losses released? Have I "disposed of the interest in the LLC"?? 

Thanks!

[Mike9241]

Unless you aggregated rental properties for tax reporting purposes, the passive loss should have been released in the year the property was sold. Being owned by an LLC has nothing to do with it. 

[martin3]

Thanks Mike. I guess I wasnt clear.  I sold the property last year so that is my question - how to make it happen?

I should've explained that I receive a K-1. We are a 3 member LLC (taxed as partnership) and only owned the 1 property that was sold.  I has run losses that have been carried forward.  The 2025 K-1 has 9.a. Net Long Term Capital Gain to reflect the sale, but I don't see how I'm supposed to trigger the online program to release the loss carryforwards that turbotax has been accumulating.  I recall hearing that checking the box "I disposed of my interest this year" would cause that to happen. But I haven't disposed of the interest. We still have the LLC and will reinvest the cash. How do I do it?

[RobertB4444 · Accepted solution]

The loss carryforwards are released at the end of the partnership not at the sale of the property.  If the partnership is continuing then the losses are continuing to carry forward.  When you reinvest the money from the sale you will still have suspended losses that you can add to.