The affect of unemployment affecting rental losses

[sengchang]

I have a client who has some current rental losses. He also received some unemployment benefit.

The  rental losses are being reduced by the unemployment benefit from each rental property and as to the total loss. So, it looks like the unemployment has a double affect on the rental losses.

[Terry53029]

What is your clients AGI

[abctax55]

And... what's the filing status?

Plus, have you looked at F 8582 to follow the numbers?

[abctax55]

And, I miss our Grammar policeman... 

[Accountant-Man]

Unemployment raises AGI, and so does wages, interest, dividends, capital gains, alimony received, taxable SSI, business income. Which then could limit allowable rental losses.

It's not just unemployment.

[itonewbie]

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@sengchang wrote:

The  rental losses are being reduced by the unemployment benefit from each rental property and as to the total loss. So, it looks like the unemployment has a double affect on the rental losses.

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What is the double effect you are referring to?  There is none.  When PAL is limited and there are multiple properties, that limitation will be allocated among those properties.  That's one and the same.

Also, unemployment compensation is taxable for federal tax purposes.  Since it's not among the type of income that is to be disregarded for purposes of §469(i) as defined under subparagraph (3)(E), the unemployment compensation will be part of the MAGI that could limit your client's PAL.