To clarify an earlier post, can I reduce my gain on the sale of a second home by the carryover passive activity losses incurred when a property was a previous rental? Thanks again
Yes, the passive losses that were carried over from the rental property losses incurred in the prior years would be used to reduce the profit on sale of the rental property.
The reason is that tax law allows for a situation whenever a taxpayer sells a passive rental property for that taxpayer to be able to use the suspended passive losses from earlier years to offset the gain generated by the sale."
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