$25.00 
Learn more
Submitted By: Betty
Answered: August 31, 2015 12:11 pm
Answered: August 31, 2015 12:11 pm
I had rental property on which there were suspended passive losses. Then my child lived in the property for several years (personal use for which no rent was received). I just sold the property. Can I take the suspended passive losses?
Suspended passive losses become deductible in the year in which there is a complete disposition of the property in a fully taxable event to an unrelated party. The fact that the losses remained suspended during the years of personal use does not erase them; the losses become deductible in the year of sale without regard to passive activity income.
advertisement
Featured Books
Tax Glossary
Private letter ruling
A written determination issued to a taxpayer by the IRS that interprets and applies the tax laws to the taxpayer’s specific set of facts. A letter ruling advises the taxpayer regarding the tax treatment that can be expected from the IRS in the circumstances specified by the ruling. It may not be used or cited as precedent by another taxpayer.
