Posted by JHyre in Ohio on February 10, 2002 at 08:11:58:
You must restore your PiC before you can make distributions under state law. PiC is not negative if you have positive retained earnings. You cannot have negative basis in property. Rentals are per se passive…two exceptions can apply- $25k of passive losses may be taken if you make< $150,000 OR if you put at least 750 hours into RE AND at least 1/2 of your time spent providing services is spent on RE, RE losses are active. Whether your income from the sale on the L/O is ordinary depends upon whether that is a dealer property…see the how-to articles for my piece on that topic.