Convert to a corporation for rentals

[Duane Anderson]

A client has six rentals owned personally in FL. Because of their income they are unable to deduct all of the rental losses each year. If we transfer the rentals and debt to a corporation (S corp) can we deduct 100% of the rental losses if the taxpayer puts enough $ in to show net equity?

And can the prior year losses be carried forward to the Corporation and used there.....The losses would be released upon sale but probably cannot be used since this would be a transfer and not a sale?

Thanks for any input you can provide...Duane E. Anderson

[TXEA]

It will still be passive rental real estate subject to the 25000. The character of the activity stays the same - rental real estate and passes on the Schedule K-1 as passive rental real estate.