Hello all!

First and foremost, thank you in advance for your advice! A little confused by something and hope someone can shed some light on this for me:

I have a client who is a real estate professional. Primary business is RE sales. Client also owns two income-producing properties - a commercial building and a vacation rental. Both properties are reported on the same schedule E, though the commercial building is held by a disregarded LLC.

Client has made election 469(c)(7)(A) to group all rental activities, and client meets both material and active participation standards.

This year, client's commercial building netted $35k, but vacation rental netted a $65k loss. In aggregate, loss is ~$29k. The vacation rental has a PY unallowed PAL of $35k. Given that commercial building had income of $35k, can I apply a PY unallowed PAL from the vacation rental, thus increasing aggregate loss to ~$64k?

Thank you again for taking time to read through this! I appreciate you!