Rental Income Loss

Forum|Forum|4 years ago
April 8, 2022
2 replies
14 views

On 2020's tax return, my client was single with rental property with both active and material participation. In 2020, my client was able to claim the rental passive activity loss to reduce her AGI. In 2021 my client got married, is filing married filing joint and continues to actively and materially participate in her rental property. However, in 2021 her passive activity loss is being disallowed. Why is the loss being disallowed?

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Best answer by TaxGuyBill

Income too high?

T

TaxGuyBillAnswer

Level 15

Income too high?

J

jsoles24Author

Level 3

With her husband's AGI, her 2021 AGI is double her 2020. So I believe that yes her passive activity loss phased out because her AGI is greater than $150,000 for MFJ. In 2020 when she was Single, her AGI was $108,000 so she was able to take a portion of her passive activity loss. Thanks TaxGuyBill

abctax55

Level 15

Form 8582 will show you what is happening. As Bill points out, the income is probably too high. And nope, MFS wouldn't solve the problem.

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