Passive loss question

[dhawkcpa]

He & she got a nasty divorce in 2009. They filed separate 2008 returns. They split the joint rental property on schedule E. The passive loss carryovers could not be taken on either 2008 return due to her high income.

For 2009 they are divorced and she can only carry over her losses due to income. He has little income and the huge carryover would be wasted in low brackets.

Does anyone think I can let his loss carry over to 2010 when they expect to sell?

Thanks in advance.

Dennis

[Burke]

The passive losses would have been suspended simply because they filed MFS in 2008 anyway. Since they now file as single, and each owns 1/2 of property, they should be filing separate Sche E's, and I see no reason why he would not c/o 1/2 of the suspended 2008 loss to his 2009 return. If it cannot be used in 2009, it will be used on sale of the property to offset his 1/2 of gain in 2010.

[dhawkcpa]

I agree but my issue is if I can intentionally not use up the carryover in 2009 against a small income when it would be nice to use it in 2010 when the property is sold. I doubt that I have the option. Thanks.

[Gretel]

Yes to your doubts, you don't have the option.

[Burke]

I agree. That is not an option.

[dhawkcpa]

Thank you both. I agree but was hoping I was wrong, this once.