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I have glanced at Form 8582 and I believe that when I fill it out, it will assure me that I can take the expenses.

A careful reading of the instructions to Form 8582 should reveal that the passive activity should NOT be reported on the form if you dispose of the activity in a fully taxable transaction (i.e. not a 1031 exchange, or an involuntary conversion, or similar).

Even if it weren't a fully taxable transaction, if you have 200k of taxable gain, that would be a passive activity gain and would offset a like amount if passive activity losses.

Either way, you shouldn't have a problem deducting your ordinary rental expenses.

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