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Suspended PAL with sale of converted rental property

sjpaccounting
Level 1

I must first apologize if this question has an obvious answer and I just look dumb for asking it...but I keep mulling back and forth so I am seeking guidance from professionals smarter than me!

 

Client has suspended PAL from a converted rental property.  Client sells the converted rental property, but it is one of those tricky situations where there is no gain or loss on the sale of the rental.

My question is, do the suspended losses get released upon the sale of the rental property when there is no gain or loss to report?  It passes the other tests, where it wasn't sold to a relative, it was their only rental so it passed that test as well...it's just the wording of recognition of taxable gain or loss that is throwing me off.

If the losses do not get released, they can continue to be carried forward correct?

Thanks for any guidance you can give me...just be gentle if the answer is obvious and I'm a little slow! 

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3 Replies 3
Dreams
Level 1

good

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Just-Lisa-Now-
Level 15
Level 15

Yes, at disposal of the property the suspended losses get released.   if you mark Box H on the Sch E worksheet, the program should do the rest


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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sjpaccounting
Level 1

Thanks Lisa!  I was taking the words literally - no taxable gain or loss - so no loss suspended.  I will release those losses!

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