- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Can tax payer who actively participates take a passive loss on rental. He chooses tenant. Does all the repairs. Is not a realtor. Thanks
This discussion has been locked. No new contributions can be made. You may start a new discussion here
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
He can deduct up to $25,000 losses depending on his modified AGI and filing status. Form 8582 shows the calculations.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
MFJ line 1 wages $133,201 line 4d pension $69,277 line 7 -$20,372. Total income $182,106 adjustment to income $250 AGI $181,856
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Sorry pal, no PAL. 🙂 AGI is over $150K so you're beyond the phase-out range.
Isn't line 7 capital gains? How did you get beyond the -$3K limit on losses?
Rick
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
I got beyond $3,000 loss with passive activity clicked. When I un do it there isn't even a loss. It only says 0. Even though the loss was that amount. So if over $150,000 income you cant do passive loss
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Over $150K no $25K exception to the PAL rules. If there is a complete disposition in a taxable transaction suspended PALs associated with that activity are deductible. Basic IRC Section 469.
Did you actually look at the 8582 and its worksheets? And the instructions?
Since you don't know this you definitely should.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
I do not get how pro series would put it through. It seems the income amount
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
why won't it do the $3,000 at least?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Operating income/losses on real estate have NOTHING to do with capital gains/losses.
You are very confused on this issue.
I suggest:
1) Find a mentor to help as you are doing a disservice to your client
2) Seek local professional advice if you are not a professional tax preparer.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
I may be complicit in this confusion. Way back up there I read:
@MGC94 wrote:
MFJ line 1 wages $133,201 line 4d pension $69,277 line 7 -$20,372. Total income $182,106 adjustment to income $250 AGI $181,856
but now it sounds like this was a passive activity loss (so probably "line 7" is just a typo which led us down the capital loss rabbit hole). The passive loss would pass through Schedule 1 and end up on line 8 instead of line 7.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Rick... maybe... maybe not.
But the disconnect between $ 3000 capital loss & rental real estate income/loss/PIGS & PALS still exists.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
so if you dont take passive losses a rental can only come across as 0?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
PAL 101:
Passive losses are limited to passive income.
If AGI is low enough, passive losses from a real estate rental might be deductible up to $25,000.
Suspended passive losses get freed up when the activity is disposed of in a fully taxable transaction. So quite often I see several years of suspended losses, followed by a big loss allowed in the same year that there is a capital gain on the sale of the real estate (I have one that came in Sunday that I haven't looked at yet!)
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
So am I correct in saying that line schedule 1 line 5 can only be 0 if the income is over $150,000?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Would that be right only $0
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Yes, $0. AGI is too high.