TaxGuyBill
Level 15

1031 Exchange and related party.  Both of those would disallow the passive losses to be released.

However, I think the actual problem is how to tell the program that the "boot" is passive, so the passive losses would offset that.  I suspect that the program can't do that, and therefore you may need to manually do that  (manually enter the deduction on Schedule E and manually reduce the passive loss carryover).