{"id":470,"date":"2014-05-16T02:31:48","date_gmt":"2014-05-16T02:31:48","guid":{"rendered":"https:\/\/0c8fb60.netsolhost.com\/en\/?p=470"},"modified":"2022-11-17T02:37:13","modified_gmt":"2022-11-17T02:37:13","slug":"244-can-unused-rental-losses-be-deducted-in-a-bankruptcy","status":"publish","type":"post","link":"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/international-taxation\/244-can-unused-rental-losses-be-deducted-in-a-bankruptcy\/","title":{"rendered":"Can Unused Rental Losses be Deducted in a Bankruptcy?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Can you deduct unused rental losses in a bankruptcy?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>LAW:<\/strong>&nbsp; Under IRC&nbsp;<strong>\u00a7<\/strong>&nbsp;469(g), current and carryforward passive activity losses are fully deductible in the year of an entire disposition in a&nbsp;<strong>fully taxable transaction<\/strong>&nbsp;to an unrelated party.&nbsp; A qualifying disposition may create a Net Operating Loss (NOL) which can be carried back.&nbsp; See IRC \u00a7 172<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Once the amount of Cancellation of Debt (COD) income is determined, IRC \u00a7 108(b)(2) requires the taxpayer to reduce tax attributes in the following order:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(A) Net operating losses (NOL);<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(B) General business tax credits<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(C) Minimum tax credits<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(D) Capital losses;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(E) Property basis;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(F) Passive activity loss and credits&nbsp;<strong>THIS IS RENTAL REAL ESTATE UNUSED LOSSES CARRIED FORWARD.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(G) Foreign tax credits<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Summary conclusion<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suspended passive losses must first be applied against any relief of indebtedness (debt cancellation). If the debt forgiven under section 108 fully absorbs current and suspended passive losses nothing is deductible on the return.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The same logic applies to NOL\u2019s.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Can you deduct unused rental losses in a bankruptcy? LAW:&nbsp; Under IRC&nbsp;\u00a7&nbsp;469(g), current and carryforward passive activity losses are fully deductible in the year of an entire disposition in a&nbsp;fully taxable transaction&nbsp;to an unrelated party.&nbsp; A qualifying disposition may create a Net Operating Loss (NOL) which can be carried back.&nbsp; See IRC \u00a7 172 Once [&#8230;]<\/p>\n<p><a class=\"understrap-read-more-link\" href=\"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/international-taxation\/244-can-unused-rental-losses-be-deducted-in-a-bankruptcy\/\">Read More&#8230;<span class=\"screen-reader-text\"> from Can Unused Rental Losses be Deducted in a Bankruptcy?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,14,18],"tags":[],"class_list":["post-470","post","type-post","status-publish","format-standard","hentry","category-international-taxation","category-llc","category-sub-s-corporations"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.10 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Can Unused Rental Losses be Deducted in a Bankruptcy? - USA Tax Help<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/international-taxation\/244-can-unused-rental-losses-be-deducted-in-a-bankruptcy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Can Unused Rental Losses be Deducted in a Bankruptcy? - USA Tax Help\" \/>\n<meta property=\"og:description\" content=\"Can you deduct unused rental losses in a bankruptcy? LAW:&nbsp; Under IRC&nbsp;\u00a7&nbsp;469(g), current and carryforward passive activity losses are fully deductible in the year of an entire disposition in a&nbsp;fully taxable transaction&nbsp;to an unrelated party.&nbsp; A qualifying disposition may create a Net Operating Loss (NOL) which can be carried back.&nbsp; See IRC \u00a7 172 Once [...]Read More... from Can Unused Rental Losses be Deducted in a Bankruptcy?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/international-taxation\/244-can-unused-rental-losses-be-deducted-in-a-bankruptcy\/\" \/>\n<meta property=\"og:site_name\" content=\"USA Tax Help\" \/>\n<meta property=\"article:published_time\" content=\"2014-05-16T02:31:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-17T02:37:13+00:00\" \/>\n<meta name=\"author\" content=\"LONYOUNG\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"LONYOUNG\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/international-taxation\/244-can-unused-rental-losses-be-deducted-in-a-bankruptcy\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/international-taxation\/244-can-unused-rental-losses-be-deducted-in-a-bankruptcy\/\"},\"author\":{\"name\":\"LONYOUNG\",\"@id\":\"https:\/\/www.usataxhelp.com\/en\/#\/schema\/person\/42e3184ba509e75d345d3e43f1dff839\"},\"headline\":\"Can Unused Rental Losses be Deducted in a Bankruptcy?\",\"datePublished\":\"2014-05-16T02:31:48+00:00\",\"dateModified\":\"2022-11-17T02:37:13+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/international-taxation\/244-can-unused-rental-losses-be-deducted-in-a-bankruptcy\/\"},\"wordCount\":177,\"publisher\":{\"@id\":\"https:\/\/www.usataxhelp.com\/en\/#organization\"},\"articleSection\":[\"International Taxation\",\"LLC\",\"Sub S Corporations\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/international-taxation\/244-can-unused-rental-losses-be-deducted-in-a-bankruptcy\/\",\"url\":\"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/international-taxation\/244-can-unused-rental-losses-be-deducted-in-a-bankruptcy\/\",\"name\":\"Can Unused Rental Losses be Deducted in a Bankruptcy? 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