I meet a wired question. I know that the rental real estate loss allowance is a federal tax deduction available to taxpayers who own and rent property in the U.S. Up to $25,000 may be deducted as a real estate loss per year as long as the individual's adjusted gross income is $100,000 or less. However, one of my client has two rental properties on schedule E. The first rental property has loss of $87,915, an one schedule E line 26 of the tax return, all $87,915 is tax deductible. The second rental property has loss of $9,733 and total not deductible on schedule E, and the whole $9,733 was sent to the form 8582.
So my question is, why this person can take and deduct the whole $87,915 rental loss (over $25,000 limitation) of the first property on his individual tax return in Lacerte? Is there any rule that I did not realize?
