Welcome back! Ask questions, get answers, and join our large community of tax professionals.
Showing results for 
Search instead for 
Did you mean: 

Sale of Rental and PAL Carryover

Level 2

I have a client who owns 3 rental properties all will prior PAL.  One property was sold this year but Pro Series is taking PAL from all three properties - not just the one property that was sold.  Does anyone know how to fix this, so I PAL is only deducted on the property sold.  Cannot override anything on form 8582.

0 Cheers
1 Comment 1
Level 15
Level 15

Thats how it works, passive activity losses get applied to passive activity gains, doesnt matter if its the same property.  You dont get to save them up for the other properties.

The first time this happened to me, I freaked out, but other, more experienced preparers, explained thats how it works.