One of several rental properties held by a partnership has been foreclosed on. The general partner has been receiving rental losses from this property for several years, all of which has been carried forward as unallowed passive loss. Several questions:
1) Does the foreclosure release all the unallowed passive loss that the partner has accumulated for this property?
2) The partnership has been amortizing refinancing fees on this property. Is the partner's share of the remaining unamortized balance treated as a passive or as a non-passive loss?
3) If the foreclosure results in a capital gain, I presume that it releases disallowed passive losses equal to the partner's share of the gain. If it results in a loss, is the partner's share of the loss treated as passive or non-passive?
4) Can the partner's share of any debt relief income be offset by disallowed passive losses?
Any help would be greatly appreciated.
1) Does the foreclosure release all the unallowed passive loss that the partner has accumulated for this property?
2) The partnership has been amortizing refinancing fees on this property. Is the partner's share of the remaining unamortized balance treated as a passive or as a non-passive loss?
3) If the foreclosure results in a capital gain, I presume that it releases disallowed passive losses equal to the partner's share of the gain. If it results in a loss, is the partner's share of the loss treated as passive or non-passive?
4) Can the partner's share of any debt relief income be offset by disallowed passive losses?
Any help would be greatly appreciated.