The National Directory of Certified Public Accountants

Ask A CPA - Rental Expenses

Are My Prior Years Disallowed Passive Losses Lost When I Sold My Rental Property This Year?

No. Your prior year's disallowed losses will be allowed in full in the year of a full disposition. The current year's income or loss will be combined with the prior year's disallowed losses and the net amount will be allowed in full and is reportable on IRS Schedule E.

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