Suspended Passive Losses on rental not rented in year of sale

[wawalter]

Hello,

We sold a vacation rental condo in Florida early in 2021.  We had not rented it since late 2020, so TT had me delete the entry, since it was not actually rented or available for rent in 2021.

I understand I should be able to apply the suspended passive losses from the five years we owned the condo on to my taxes in the year of the sale, but I don't know were to do that in TT.  Before I deleted the condo from the rental section, I could see the passive losses showing up there when I clicked on sold this property.

Thanks.

[PattiF · Accepted solution]

You should be able to take the passive losses.  You can clear your return and start over to get the tax return from 2020 with the rental information to populate your 2021 tax return.

Here are instructions to clear and start over in TurboTax.

[Mike9241]

 so TT had me delete the entry, since it was not actually rented or available for rent in 2021.

if TT said this it badly misinformed you. you need the info to allow the PAL c/o and even report the sale 

even if not rented or sold in 2021 you need to leave the info so the info would carry over to future years when it was rented or sold.

[wawalter]

Here is what it said.

"Since this property was not a rental at all in 2021, you should delete it as a rental.  Make sure to keep your complete return, including the Depreciation Report for this property, from 2020.  You'll need that information when you sell the property or convert it back to a rental."

I did have the information, but couldn't find anywhere to input it.

Anyway, just went back and started over and didn't delete the property.

Thanks.

[ColeenD3]

The advice is correct. You do not fill out the Rental section if there is no rental use. Enter your information in Sale of Business Property. Look at your 2020 return for the amounts of the passive loss and the depreciation.

Steps:

1) Wages and Income

2) Other Business Situations

3) Sale of Business Property

4) Other Property Sales

5) Select Sales of Business or Rental Property that you haven't already reported

[Carl]

WARNING! Do not select the option for "I did not rent or attempt to rent this property in 2021". If you select that options, then the SCH E and all the PAL and depreciation history will be permanently deleted.