$25K Passive Loss Limit

$25K Passive Loss Limit – Real Estate Accounting for Rental Income (Passive Activity) Loss

Most rental owners claim tax losses, even when they are making a profit. You can deduct up to $25,000 of rental losses on your tax return if your adjusted gross income is less than $150,000.

If your adjusted gross income is less than $100,000, you can deduct the full $25,000.

If your adjusted gross income is between $100,000 and $150,000, you can deduct up to ($150,000 – Your Income)/2. So if your AGI is $120,000, you can deduct up to $15,000 (150k – 120 k)/2.