Reply to Loss Deduction and over 150,000 AGI

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Hi We were finally getting to our taxes and we just realized that we cannot deduct any losses if our income is over $150,000. My husband and I are reading the IRS website and getting different meaning to what is read. He thinks we cannot deduct passive losses at any situation and I am reading that we can deduct our loses as long as we have passive income. 2013 we just moved to a new house at teh end of the year (December) and no tenants. I just got tenants in teh property in March 2014. Can someone please clarify. THanks so much![/quote]

If you didn't have tenants until March 2014, the property wasn't considered a rental property in 2013. How would you be able to deduct passive losses related to rental activity, if the house was not rented in 2013?[/quote]

The IRS considers the day in which you put the house on teh market for rent is the day that your house becomes a rental...no?. The losses incurred is the advertisement, the utilities that was paid, the clean up, paint etc. etc while no tenants were living there. Since we didn't have any passive income at the time and our AGI is over 150K, we cannot deduct the passive losses because of no passive income. I was wondering if we can still deduct passive losses wehn we do have passive income for 2014 even making over 150K AGI or is the only time we can deduct passive losses when we sell our rental or is a real estate professional? This is a question for next years taxes btw.[/quote]

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