I believe that is the problem.  By reporting it as sold on the asset entry worksheet, it lumps it into the passive activity loss limitations on Form 8582 line 1b, and puts -0- on the loss allowed on the 4797.  If I check the box for other passive activity exemptions on the Schedule E Worksheet, item G, it lets the loss show on the 4797, but then does not let the current year loss limitations on Form 8582 line 1b show, but has -0- there.  There should be a way to get the correct current year unallowed loss to show on the property, but still be able to report the loss on the sale of the property.

How do I do that?