We sold a rental in 2017 that qualifies as a "qualifying disposition". Will the passive losses offset ordinary income and show on page 1 of our 1040 to determine our AGI?

[GeoPgM]

The property was originally our primary residence, but has been a rental for the last 8 years.  We've accrued more than $100K in passive losses over that time, and want to be sure the loss should be used this year to offset ordinary income (i.e., W-2's, dividends, capital gains, etc.).

[JulieH1 · Accepted solution]

Finally, you get to use those passive losses!  Congratulations!

It is deducted as "ordinary income" on Schedule E.  In other words, it will offset any other income that you have, such as W-2 wages or self-employment income.