Rental converted to personal use

[Don in Upstate NY]

Client owns single family house which he has rented out for several years. In 2011 he sold his main home and moved into the rental home. Are the passive losses which were disallowed during the rental period now released since he no longer has any rental activity, or must they remain suspended until he disposes of the property itself?

[Gail in Virginia]

It is my understanding that they are not released until he disposes of the property. After all, he could change use again and go back to renting the property. In fact, he could change to personal use just long enough to take the losses and then change back to rental over and over again if that were sufficient to release the losses.

[Don in Upstate NY]

Thank you. Lenghty discussion archived on another board indicates that you are correct.

Question answered.