| |
 Real
Estate Professionals - Real estate
professionals can write-off all rental losses in the year of the loss on
their tax return. No rental losses are carried forward, they
are written off in the year of the loss. You must meet IRS
guidelines to claim real estate professional status. The IRS
guidelines for claiming real estate professional status can be
complicated depending on your situation. Be sure to consult
with your accountant or attorney to determine if you qualify to
claim real estate professional status.
Passive
Participants - If you own part or
all of an income property and do not actively participate in the management
of the property, you are not allowed to write off any rental losses in the year of
the loss on your tax return. Your rental losses build-up from
year-to-year until you have rental income to offset the losses or
you sell the property. When you sell the property, you can
write-off all unused rental losses that have accumulated while you
have owned the property.
Active
Participants - If you own income
property and actively participate in the management of the property and your
adjusted gross income is less than $150,000, you can write off up to
$25,000 in rental losses. For an adjusted gross income of
$100,000 or less, you can write off $25,000 in rental losses.
The amount of rental losses that you can write off is
proportionately phased out between $100,000 and $150,000. For
example, if your adjusted gross income is $125,000, you can write off
$12,500 in rental losses in the year of the loss. If you are
an active participant and your adjusted gross income is $150,000 or
more, you can write off no rental losses on your tax return in the
year of the loss. Be sure to verify IRS guidelines if you are going
to claim active participant status. Note: When you sell your income property, you can write-off any
unused rental losses that have accumulated while you have owned the
property.
|
|
