taxiowa
Level 9
Level 9

First of all, how does a property have $120K of passive loss carry forward.  And then to boot have a loss on sale of $30K. I would have fired them as clients long ago, because some bookkeeping does not seem right.

But in answer to your question, there is a box on the schedule E worksheet up top that says check me if the client has a total taxable distribution of property.  Then all previous losses will also be recognized.