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.).

[MarilynG · Accepted solution]

Yes, all accumulated passive losses are allowed the year of the sale of rental property.  This will offset your other taxable income.

Be use you indicated 'active participation' for your rental.  You may have some depreciation recapture offset the passive carryover losses.

Here's some info to help you:

https://turbotax.intuit.com/tax-tips/rental-property/selling-rental-real-estate-at-a-loss/L2RKgClm4