19 Nov Passive Asset Disposition
Posted at 00:00h in Passive Activity
There are two distinct issues to evaluate when disposing of a passive asset:
Is the disposition considered to be a qualifying disposition under reg 1.469 making the losses deductible?
Is the gain on the sale truly passive income and entered on IRS form 8582 triggering deductibility of unrelated passive losses?
Current and suspended losses are deducted in a ‘qualified disposition’ if:
The disposition is in its entirety.
The disposition is to an unrelated party.
The transaction with buyer is fully taxable.