Originally posted by rwm221
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However, in the year of a fully taxable disposition of the property, you can deduct the loss (assuming you have been carrying it forward correctly each year). "Fully taxable disposition" can include some Sec 121 exclusion if it applies in the year of disposition.
Not all software handles this very easily. My software allows me to mark a rental activity as "inactive" so that the data supporting the adjusted basis and passive loss remains in the return, even without any rental income or expense.
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