IRS Form 8582 (Passive Activity Loss) - Sale of Passive Activities with Suspended Losses

IRS Form 8582 is completed by noncorporate taxpayers to report their passive activity income and losses. Passive activity losses can generally only be offset against other passive activity income.
If a taxpayer has prior-year unallowed losses related to a passive activity, those losses will be allowed when the taxpayer makes a complete disposition of that passive activity. The prior-year passive activity losses are reclassified to nonpassive losses allowed and can offset other nonpassive income.
In this example, we have a taxpayer with three Schedule K-1s. Two Schedule K-1s are from passive activities, and the third Schedule K-1 is from a business where the taxpayer materially participates in the operations. One of the passive activity Schedule K-1s is marked final because the taxpayer redeemed out of the investment during 2023. Because the redemption qualifies as a complete disposition, the prior year's unallowed losses related to that investment are released.
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[@alexcolombu1025]

Keep up the great work my guy.

[@richardfigueroa4544]

Is the passive activity is a real estate property and the asset is sold, would the total of current and past passive activity losses be used to offset and capital gains?