@thecraigs4 wrote:
Also, can nonpassive losses to be carried forward or are expenses only allowed up to the nonpassive rental income amount in the current year? I really need help with this.
Nonpassive losses can create an NOL (net operating loss), but that would be unusual in the scenario you provided.
Regardless, if you had a net nonpassive loss, there would be no carryover.
The expenses that are subject to the vacation home limitations (per Section 280A) will never create a net loss on your return. Those expenses are limited to the amount of your rental income.
On the other hand, if you had the (rather bizarre) situation where your rental income was $10,000 and you had, for example, total management, commissions, and advertising expenses of $50,000, you would have a net nonpassive loss which could be used against all of your other income and could, potentially, create an NOL.
