New (tax) year, new help!

Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

UltraTax CS has released all of the suspended passive losses for a rental real estate property that was completely disposed. Is there a special $25,000 allowance for rental real estate?

Answer

If your client actively participates in a passive rental real estate activity, you may be able to deduct up to $25,000 of the loss from nonpassive income. If the property was not disposed, UltraTax CS would limit the losses on Form 8582 in accordance with the special $25,000 allowance rules. However, in a complete disposition, IRC Section 469 (g) (1) states when a taxpayer disposes of entire interest in a passive activity, both current and suspended losses generated by that activity (as well as any loss on the disposition) become fully deductible.

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