In 2019 I will sell my only rental property (for a slight capital loss after depreciation, but that’s not at issue here). It’s residential real estate held for 10 years.
Primary question is: can I use the suspended PAL (Passive Activity Loss) to offset income from converting part of a vanilla traditional IRA to a Roth IRA?
Secondary question: will I report the suspended PAL via schedule E, some other schedule, or direct on 1040? Doesn’t matter how it reaches sched E or whichever, as long as I can plop the PAL there for gaming out tax scenarios.
My tax situation s/b pretty simple: small pension, small RMD, smallish cap gain and dividend income.
– Ordinary income outside of Roth conversion is less than $30k
– Capital gains income should be under $15k
– AGI outside of Roth conversion s/b under $50k
I looked hard via Google for a clear answer to this question and found nothing quite directly addressing it in a way that cleared up my doubts. I looked at IRS instructions–see 8582–but they were inconclusive, at least to this tax amateur. It seems like a common situation for retirees or lower income taxpayers disposing of rental properties.