Hi John - Under the passive activity loss (PAL) rules, you can deduct rental losses against passive income. 

@Mary Jay why did you report it if there was no loss coming out of your pocket. 

As long as one person is a real estate professional, you can usually use rental losses offset joint income.

I’m aware of loss harvesting when it comes to stocks, bonds, etf’s, etc. but how can this occur with real estate?

I ran into this recent TurboTax article  that led me to believe it was possible: Second, you may have a net operating loss (NOL) if the Section 1231 loss is large enough to reduce your other income below zero.

Once you have REPS the distinction between passive income (or losses) and active income (W2) disappears and all those tax losses you have been banking can be applied to the W2.Good luck

I have suspended Passive Activity loss that would reduce the gain, but not eliminate the gain from tax POV.

Selling your property now will incur commission fees, so you’ll take additional losses on the transaction.

However, I agree it’s better to just cut the losses now and learn from this crazy experience.

My wife drives across town to get her hair done.