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Old 03-19-2017, 10:24 PM
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Using Schedule E suspended losses against active income on disposition

I have a rental/investment property on which I have suspended losses captured on Schedule E (after accounting for passive income). I know that when I dispose off this rental property, I can offset the gains using the suspended losses. But, if there are still some losses left after disposition and offsetting the gain on sale, can these losses be used to offset active income (like my W2 income) during that year or later? Are there any AGI limitations for this?



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Old 03-20-2017, 06:06 AM
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I have a rental/investment property on which I have suspended losses captured on Schedule E (after accounting for passive income). I know that when I dispose off this rental property, I can offset the gains using the suspended losses. =>CorrectHowever, many landlords with multiple properties elect to combine them as one activity for tax purposes. In this event, if you own several rental properties and only sell one, you can't take the deduction because you won't have sold "substantially all" of your interest in your rental activity. If you aren't a real estate professional, you can write off up to $25,000 of your rental property losses, called passive activity losses by the IRS, against other income. To qualify for this write-off, you need to be actively involved in running your rental properties, although you can have a third-party manager helping youYou also need to have an Adjusted Gross Income that is $100k or less. In addition, you must sell the property to an unrelated party?that is, a person other than your spouse, brothers, sisters, ancestors (parents, grandparents), lineal descendants (children, grandchildren), or a corporation or partnership in which you own more than 50%.

But, if there are still some losses left after disposition and offsetting the gain on sale, can these losses be used to offset active income (like my W2 income) during that year or later? Are there any AGI limitations for this=====>> No you lose it forever;



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