Need Help on Depreciation Recapture

[ETax847]

Client has a rental condo, that he is selling at a gain.  He has suspended rental losses due to making too much money.  Can someone please explain how the suspended losses come into play when he sells the condo?

[ILLMAS]

http://www.thetaxadviser.com/issues/2008/may/disposingofanactivitytoreleasesuspendedpassivelosses.html

[BulldogTom]

The suspended losses are released at the disposition of the asset.  ATX handles this really well.  Just proceed with the disposition as normal and it will flow through to the 1040 properly. 

Tom
Newark, CA

[Abby Normal]

Check the box on Sch E for final disposition.

[schirallicpa]

had this situation a couple years ago.  yes- ATX handles well.  Remember - the losses may still be suspended for a while, depending on income.  

 

[michaelmars]

the suspended losses will show up on schedule E so you get the benefit at ordinary rates.  Depending on when the condo was put in service [more info needed] the amount claimed as depreciation will be unrecaptured capital gain taxed at 25%.