Yes.  But are the annual IN losses 'lost' at the 1040 level or do they carry forward?  

Said another way, if the property is eventually fully depreciated for both federal and IN purposes and the sale generates a $1M gain at the entity level, is there an individual level IN offset to that gain of all the prior year's losses (due to depreciation taken) that did not offset any income?  *For federal purposes, the depreciation offset other income in year 1.   

Or, do we not track IN passive loss carryforwards separately from federal passive loss carryforwards for IN and the annual IN losses are lost and never utilized?