Is there a limitation on the loss carryforward of passive losses?

(1) On December 28, 2010 at 1:14 am Wwwzz [0] said:

The ability to claim Active Rental Property Losses max out at $25,000, as long as a married filing jointly couple has an AGI of less than $150K. What happens to the losses if the tax payers AGI exced the $150k? The IRS Site is not clear how things are handled if the tax payers exced the AGI requirment.

As best I understand (I do not have a solid source and clarify if I am incorrect), the rental losses for the property accumulate and are realized at the time of sale of the specific property generating the losses.

Finally my question... What form do these losses take at the time of sale and carryforward? Are they now LT Capital Losses, or do they go against Income and lower AGI, they are not passive since the tax payers were material owners and active in the RE investment?

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