Reply to Loss Deduction and over 150,000 AGI

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]

if your AGI is more than 150K, you can deduct passive losses only to the extent you have passive income i.e. until you get to zero. The excess passive losses are carried forward to future years. In your case, in 2013 you only have passive losses and no passive income. None of the losses are deductible in 2013 but you can cary forward to 2014. Keep in mind, that with depreaciation expense for the rental property, it is likely that your losses will always exceed your renatl income. So you will not be taxable on the rental income since you will reduce it down to zero, but you will not be able to reduce your taxable income for any of the passive losses.  [/quote]

Not trying to make this difficult but just to clarify do you mean to say : So you will not be taxable on the rental income (passive income) since you will reduce it down to zero, but you will not be able to reduce your regular income (any income not passive) for any excess passive losses?

Thanks in advance![/quote]

Yes. Your passive losses will never offset your ordinary income I.e. Not passive income since your AGI is over 150K. Your passive losses can only offset passive income.[/quote]

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