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Updated over 4 years ago on .

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John Fenn
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passive losses real estate

John Fenn
Posted

my wife and I own 5 rental properties in an LLC (fed partnership structure). in the early years, the business was run by a management company and we accumulated significant passive loss carryovers. my wife retired and took over running the business converting status to real estate professional (i.e. non-passive status). properties will soon be taxable and I believe 469(f) allows for offset of passive loss carryovers against non-passive income under special rule. My question is whether sales of individual properties from within LLC would allow for use of passive loss against capital gain realized on sale with respect to deferred losses attributable to sold property. Secondly, are there any other instances that allow for use of passive losses against non-business passive income, such as individual interest, dividend or capital gain income earned outside of llc by individual partners? thanks much for help !!