I have a net loss but deduct is zero

[annasmola]

Hello, I have entered income and expenses including depreciation for my rental and it shows me my net loss is at -9k and zero is being deducted why?

I have entered improvement of 7k for my rental under asset/depreciation and it tells me I have 1.4k depreciation, but at the end it tells me zero can be deducted.

thanks

[pk]

@annasmola  please can you provide me the following items  --- to understand the situation  as to why you are  not being able to take advantage of Passive Activity Loss  ( within limits )

Gross income, Gross expenses, Depreciation  ( original plus due to the  new improvements of 7K, assuming that has improved your FMV by 7K ); other passive losses  ( short-term and long term  on stocks/bonds etc. capital  etc. ), filing status,  AGI .

looking forward to these 

pk

[Mike9241]

is your adjusted gross income over $150K or $75K if married filing separate? if so, you are subject to the passive activity loss limitation. thus you get no current deduction for the loss. it is carried forward to next year. the same rule applies in future years so you get no tax beneft unless your AGI drops below the limit or you dispose of the property in a taxable transaction (a 1031 exchange does not qualify)

 look at form 8582 which will show you the loss and reason none is currently deducted. 

[annasmola]

Hi Mike, thanks for your response

8582 part II line 7 states I have 151k in AGI which would be mean I'm above the limit, but on 1040 line 11 it states AGI is 141k. Not sure why I would have two different AGIs, any idea?

[ThomasM125]

Line 7 on form 8582 lists your modified adjusted gross income, while line 11 on form 1040 lists your adjusted gross income. So, line 7 starts with your adjusted gross income and modifies it by excluding a number of things, including the taxable amount of social security benefits, IRA contributions, and the deduction for self-employment taxes. You can see the full list of adjustments by reading the instructions for line 7 of form 8582 as follows:

https://www.irs.gov/instructions/i8582