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TWW
Returning Member

3 rental properties, sold 2 in 2021. Passive carryover question.

I had a professional do my taxes for tax year 2021. On schedule E line 21 he shows losses for all 3 properties. Let’s say 1000, 2000, and 3000 for a total of 6000. 

We sold property 1 and 2 in 2021. 

For 2022 I expect another 3000 loss for property 3. 

Can I continue to carryover the 6000 from 2021 plus the 3000 more for 2022 to bring my total to 9000?

 

Want to be sure that losses from the sold properties carry forward. 

Or - since we sold 2 properties are those losses wiped out and we carry forward just 6000?

 

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1 Reply

3 rental properties, sold 2 in 2021. Passive carryover question.

No, the losses from the sold property cannot be carried forward. The only Passive Activity Loss (PAL) you can carry forward is the $6000 loss from property 3. You can fully deduct the suspended losses from the other two properties when you sell your rental property in a qualifying disposition.

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