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yoshl
Level 1

Does passive loss carryover for rental real estate if it has been sold?

I had a loss on my rental real estate on the year I sold the property. 

Will this passive loss carryover to the tax return for the next year?

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Accepted Solutions
tagteam
Level 15

Does passive loss carryover for rental real estate if it has been sold?

No. Suspended passive losses are released in the tax year the underlying property is sold to an unrelated third party in a taxable transaction.

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4 Replies
tagteam
Level 15

Does passive loss carryover for rental real estate if it has been sold?

No. Suspended passive losses are released in the tax year the underlying property is sold to an unrelated third party in a taxable transaction.

yoshl
Level 1

Does passive loss carryover for rental real estate if it has been sold?

What if it was a partial gift/partial sale to a related party? 

tagteam
Level 15

Does passive loss carryover for rental real estate if it has been sold?

Losses are not allowed until the related party disposes of the property in a taxable transaction.

Critter-3
Level 15

Does passive loss carryover for rental real estate if it has been sold?

Your unallowed loss is gifted to the relative and is used in their basis calculation  and can only be taken on their return when that property is sold. 

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