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@arttax wrote:

Client has made election 469(c)(7)(A) to group all rental activities

This year, client's commercial building netted $35k, but vacation rental netted a $65k loss. In aggregate, loss is ~$29k.

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The grouped "rental activity" has a $29,000 loss for the year.  That doesn't allow for a carryover loss to be used.

As a side note, you may want to verify that the carryover loss is valid.  You would want to verify that it was created BEFORE the taxpayer qualified under the Real Estate Professional rules, and that there hasn't been net income since becoming a real estate professional qualifications.