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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4676
Experience:  35 years tax experience, including four years at a Big 4 firm.
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What happens to passive losses when a rental property is

Customer Question

what happens to passive losses when a rental property is transferred to an LLC
Submitted: 2 years ago.
Category: Tax
Expert:  PDtax replied 2 years ago.

Hi from just answer. I'm PDtax, and can assist.

Can you confirm you were the 100% owner of the property, and that you exchanged the property for ownership of the LLC? Also, I assume you are talking about suspended passive losses.

Customer: replied 2 years ago.
100% property owner in exchange for the LLC ownership. I am talking about suspended losses.
Expert:  PDtax replied 2 years ago.
Got it. The suspended losses do not change by contributing. They remain suspended.
Further more, future losses might also be suspended as well. Depends on the operation, and if the change allows you to meet one of the exceptions to the passive activity rules.
Thanks for using just answer. Positive feedback is appreciated. I'm PDtax.