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Are suspended passive loss required to be taken against passive rental income?

jpi
Level 1

I have clients who just retired and only have a small amount of rental income from 3 rentals they actively participate. Even if suspended passive losses are not taken against the little passive income they have, they will not generate any tax liability. Is it mandatory to apply suspended losses?

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jpi
Level 1
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Terry53029
Level 12
Level 12

I believe you must net your passive losses and passive income. see pub 925

jpi
Level 1
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TaxGuyBill
Level 15

I agree with Terry; it is not an option to decide how much of a loss you want to take and how much you wan to carry forward.  If it is allowable, it is taken on the current return and does not get carried forward.