Can gain from sale of one rental property be used to offset all other rental properties' unallowed loss carried over

[hgtc]

Client has 4 rental properties, total unallowed losses = $110,000 carryover to 2025.

In 2025, he sold one property with $200k gain.  Each property is a separate property.  Lacerte offset all unallowed losses and current year losses of $53k in form 8582 with this $200k gain.  So, he has $-163,000 in Sch E #26

Is this correct?  Thank you.

[Karen_pdx · Accepted solution]

Assuming all 4 properties are passive activities, then yes that sounds correct - passive losses from any passive activity are available to offset passive income from any passive activity.

If an activity is a PTP, then the answer is different and its losses can only offset income from that PTP.

[hgtc]

Thanks.  they are all passive activities.