Article Date:
August 2022

Word Count:



Q&A: Does Grouping Rental Properties Release Suspended Losses?



I am a CPA who got a new client today. She is a top real estate broker in my city.


She has an S corporation through which she reports all her real estate brokerage and sales activities. In reviewing her personal return filed jointly with her husband, I noticed that she also has five rental properties reported on Schedule E.


Her prior CPA classified the rental properties as passive activities, and she has suspended passive losses of $72,000.


We are going to file her current-year tax return. I know she definitely qualifies as a “real estate professional” for her rental properties. Here are my questions:



Can I elect to group all five rental properties to make the 750-hour threshold easy to attain for 2021?


If she qualifies as a real estate professional, can I deduct the prior years’ $72,000 in suspended passive losses so as to reduce her current-year taxable income? ... Log in to view full article.

Log in to view full article

Already a subscriber?

Email Address


Log In Send me my password

You'll be able to read the full article and get instant access to the last few issues of the Tax Reduction Letter

Not yet a subscriber?
with a money-back guarantee