In case you are wondering why you are not showing the loss from your real estate activity on line 17 of your 1040, you should review your income other than the real estate loss. Unless you file as a real estate professional, your allowable loss is limited to $25,000 in total and that amount decreases with your other income. At $100,000 in other income, the allowable loss amount begins to decrease, and, when you reach $150,000 in other income, that $25,000 reaches zero. Any portion of the disallowed loss you didn't get to deduct in the current year is carried forward and becomes deductible when you sell the property in a fully taxable sale.
