Passive losses from rental property may be limited for income over $100,000.
Maximum special allowance. The
maximum special allowance is:
- $25,000 for single
individuals and married individuals filing a joint return for the tax
year,
- $12,500 for married
individuals who file separate returns for the tax year and lived apart
from their spouses at all times during the tax year, and
- $25,000 for a qualifying
estate reduced by the special allowance for which the surviving spouse
qualified.
If your
modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if
married filing separately), you can deduct your loss up to the amount specified
above. If your MAGI is more than $100,000 (more than $50,000 if married filing
separately), your special allowance is limited to 50% of the difference between
$150,000 ($75,000 if married filing separately) and your MAGI.
Generally,
if your MAGI is $150,000 or more ($75,000 or more if you are married filing
separately), there is no special allowance.
