Anonymous
04/01/2014 16:02
Subject: Loss Deduction and over 150,000 AGI
Anonymous wrote:Anonymous wrote:Anonymous wrote:
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.
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!
Anonymous
04/01/2014 15:35
Subject: Loss Deduction and over 150,000 AGI
Anonymous wrote:Anonymous wrote:You can certainly net passive losses against passive income. If you had no passive income, you can still deduct $25,000 generally for rental real estate unless you made over $150K AGI.
From IRS Publication 925:
"Special $25,000 allowance. If you or your spouse actively participated in a passive rental real estate activity, the amount of the passive activity loss that is disallowed is decreased and you therefore can deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing the passive activity loss. . .
The maximum special allowance is reduced if your modified adjusted gross income exceeds certain amounts. See Phaseout rule, later. . .
Phaseout rule. The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that is more than $100,000 ($50,000 if you are married filing separately). If your modified adjusted gross income is $150,000 or more ($75,000 or more if you are married filing separately), you generally cannot use the special allowance.
OP here, Yes we read the same thing and I am reading that if we have passive income, we can deduct passive losses even with AGI of 150K but my husband is reading in no circumstance will you be able to deduct any passive income with an AGI of 150K. Please clarify who is right. Some here are saying my husband is correct. I don't think he is correct.
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.
Anonymous
04/01/2014 12:26
Subject: Loss Deduction and over 150,000 AGI
the 150k mark was set in 1986 it should be 321,324.36 in 2014
Anonymous
04/01/2014 12:23
Subject: Loss Deduction and over 150,000 AGI
Yes this law is complete bull shit and has never been adjusted for inflation. It should be AGI of 500k or higher. It really makes me mad that 150k is the cut off.
You can carry forward losses so when you sell in the future but you have to document them and file taxes each yeqa
You can carry forward losses so when you sell in the future but you have to document them and file taxes each yeqa
Anonymous
04/01/2014 12:21
Subject: Loss Deduction and over 150,000 AGI
Anonymous wrote:You can certainly net passive losses against passive income. If you had no passive income, you can still deduct $25,000 generally for rental real estate unless you made over $150K AGI.
From IRS Publication 925:
"Special $25,000 allowance. If you or your spouse actively participated in a passive rental real estate activity, the amount of the passive activity loss that is disallowed is decreased and you therefore can deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing the passive activity loss. . .
The maximum special allowance is reduced if your modified adjusted gross income exceeds certain amounts. See Phaseout rule, later. . .
Phaseout rule. The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that is more than $100,000 ($50,000 if you are married filing separately). If your modified adjusted gross income is $150,000 or more ($75,000 or more if you are married filing separately), you generally cannot use the special allowance.
OP here, Yes we read the same thing and I am reading that if we have passive income, we can deduct passive losses even with AGI of 150K but my husband is reading in no circumstance will you be able to deduct any passive income with an AGI of 150K. Please clarify who is right. Some here are saying my husband is correct. I don't think he is correct.
Anonymous
04/01/2014 12:11
Subject: Loss Deduction and over 150,000 AGI
Get a CPA++
I thought I had 'simple' taxes but had cheated myself out of $$ before, or done them incorrectly. Have used a CPA for almost 10 years now and the $ we pay him is well worth it!
I thought I had 'simple' taxes but had cheated myself out of $$ before, or done them incorrectly. Have used a CPA for almost 10 years now and the $ we pay him is well worth it!
Anonymous
03/31/2014 22:43
Subject: Loss Deduction and over 150,000 AGI
You can certainly net passive losses against passive income. If you had no passive income, you can still deduct $25,000 generally for rental real estate unless you made over $150K AGI.
From IRS Publication 925:
"Special $25,000 allowance. If you or your spouse actively participated in a passive rental real estate activity, the amount of the passive activity loss that is disallowed is decreased and you therefore can deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing the passive activity loss. . .
The maximum special allowance is reduced if your modified adjusted gross income exceeds certain amounts. See Phaseout rule, later. . .
Phaseout rule. The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that is more than $100,000 ($50,000 if you are married filing separately). If your modified adjusted gross income is $150,000 or more ($75,000 or more if you are married filing separately), you generally cannot use the special allowance.
From IRS Publication 925:
"Special $25,000 allowance. If you or your spouse actively participated in a passive rental real estate activity, the amount of the passive activity loss that is disallowed is decreased and you therefore can deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing the passive activity loss. . .
The maximum special allowance is reduced if your modified adjusted gross income exceeds certain amounts. See Phaseout rule, later. . .
Phaseout rule. The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that is more than $100,000 ($50,000 if you are married filing separately). If your modified adjusted gross income is $150,000 or more ($75,000 or more if you are married filing separately), you generally cannot use the special allowance.
Anonymous
03/31/2014 22:27
Subject: Re:Loss Deduction and over 150,000 AGI
I could be wrong but here is what I did: I had passive income loss of 1.7k on my rental for 2013 which I could not dudect from our ordinary income per IRS rules but I did complete the appropriate schedule (cannot remember the number/letter) and filed it with our taxes. I plan to roll this loss into our 2014 tax filing. For example if the rental turned a profit of 3k in 2014, I only plan to pay taxes on 1.3k. I would love to know if I am wrong though.
Anonymous
03/30/2014 10:38
Subject: Loss Deduction and over 150,000 AGI
Anonymous wrote:Anonymous wrote: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!
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?
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.
Anonymous
03/30/2014 08:34
Subject: Loss Deduction and over 150,000 AGI
Anonymous wrote: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!
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?
Anonymous
03/29/2014 13:18
Subject: Loss Deduction and over 150,000 AGI
Agree on prof advice but believe your husband is correct. Out income is 700k and we deduct passive loss
Anonymous
03/29/2014 12:38
Subject: Loss Deduction and over 150,000 AGI
Get a CPA but I think your husband is correct. You can carry the losses forward and deduct passive losses when you sell the rental property.
Anonymous
03/29/2014 11:58
Subject: Loss Deduction and over 150,000 AGI
Yes take advice from some random on the web, nothing could go wrong with that...go get help from CPA. They will have to file an extension a this point
Anonymous
03/29/2014 11:53
Subject: Re:Loss Deduction and over 150,000 AGI
Time to get a CPA, seriously.
Anonymous
03/29/2014 11:08
Subject: Loss Deduction and over 150,000 AGI
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!