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sungac
New Member

Not capturing passive suspended loss

Property A and B both have Passive Suspended loss from previous years. I sold A in 2024. TurboTax not capturing the passive suspended loss on both properties. It is only deducting Property A suspended loss. I heard that if you sell one property, you can take suspended loss from all rental properties. How do i do that in TurboTax? 

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1 Reply

Not capturing passive suspended loss

you heard wrong.   if you don't aggregate properties (treat them as 1 unit) the PAL is released only on the property that is sold in a fully taxable transaction (a 1031 exchange would bar recognition of the PAL). If you aggregated (meaning you treated both properties as 1 unit) then none of the PAL is released until both properties are sold in a fully taxable transaction. 

 

However there is an exception: some or all of the PAL on property B may be released if there is active participation and your modified adjusted gross income is $150K or less see form 8582

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