Installment sale and passive suspended losses (PALs)
You can dispose of a portion of a passive activity that has a loss in the current year. The ratio is the current year gain divided by an unrecognized gain at the beginning of the year.
To show that the disposal was under the installment method, go to the activities main screen. Enter
2
in the Disposition of activity
field, then enter the installment sale of the assets. You can also use the Sale
screen for sales of partnership or S Corporation stock.If the activity has overall income in the current year, all losses are released.
