Unused passive activity losses ("PAL") are carried forward to future tax returns (they don't expire). There are two common ways passive activity losses are used up: (1) Upon the sale of the property or (2) being used up by passive income generators.
My concern with your scenario is the use of the phrase "old rental properties". With the passage time, did you use this PAL in a prior year either when the old rental properties were sold or they operated at a profit in a given tax year between 2012 and 2023? If they were not sold and operated at a loss, the PAL would have increased during the same time period. I would look at all the tax returns between 2012 and 2023 for From 8582 as well.
If you were supposed to use the PAL in a prior tax period, and did not, depending upon the tax year you can amend the tax return (2021, 2022 and 2023) to correct the carryover.
Thank you for your question @wlaurenc5555
All the best,
Marc T.
TurboTax Live Tax Expert
27 Years of Experience Helping Clients
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