topic Can I claim rental property carryover losses if selling a second property? in Investors & landlords

Can I claim rental property carryover losses if selling a second property?

CZI — Mon, 03 Jun 2019 17:17:15 GMT

We have carryover passive activity loss on a rental property of $150k, and over $240k on CA state taxes. We have had this property as a rental since 2004 I don't want to sell this property, but I want to buy another rental property and hold for two years. If I sell the second property, can I claim the entire carryover loss from the first property in the year we sell? Are there any limits on the amount you can claim? We are in the 33% tax bracket and AMT.

If I sell the second property, can I claim the entire car...

Critter — Mon, 03 Jun 2019 17:17:16 GMT

If I sell the second property, can I claim the entire carryover loss from the first property in the year we sell?

No you cannot.

Can I only take the carryover loss when I sell that speci...

CZI — Mon, 03 Jun 2019 17:17:17 GMT

Can I only take the carryover loss when I sell that specific property? What about selling like kind?

Losses are property specific.

Critter — Mon, 03 Jun 2019 17:17:18 GMT

Losses are property specific.

As Critter said, the Passive Losses are only released whe...

TaxGuyBill — Mon, 03 Jun 2019 17:17:19 GMT

As Critter said, the Passive Losses are only released when that specific property is sold in a "fully taxable transaction". So even if it was sold in a like-kind exchange (Section 1031 Exchange), the Passive Losses would NOT be released.