I have zero tax liability for 2018 thanks to the $7,500 EV deduction and my $6,500 tax liability. Can I carryover net loss rental expenses to 2019?

Hello,

My rental income from my rental will get wiped out by expenses and depreciation, thus going into the negatives. Usually, I can reduce my personal income for a greater tax return. 

However, with 0 liability, doubt i'd get anything out of it. So can I elect to carry the excess expenses to 2019 instead or will I be forced to use it to reduce my personal income, even though I'm tax-free?

Thanks,

-Joe

Coleen3
Intuit Alumni

Investors & landlords

Unfortunately, no. You can't carry it forward. The only situation that would allow you to carry forward rental losses would be if your income were too high to be able to take advantage of the full $25,000 passive loss.

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Investors & landlords

What if I bundle a project that I spent a lot of money on into a capital asset, my example being a retaining wall & garden installment, and utilize a depreciation cycle? That way I would at least get some return the following years.
Coleen3
Intuit Alumni

Investors & landlords

If it is an improvement, that is fine.
The IRS indicates what constitutes a real property capital improvement as follows:
• Fixing a defect or design flaw
• Creating an addition, physical enlargement or expansion
• Creating an increase in capacity, productivity or efficiency
• Rebuilding property after the end of its economic useful life
• Replacing a major component or structural part of the property
Adapting property to a new or different use

Investors & landlords

Ok perfect! The primary driver for my question was that my smoke alarms are failing, they're 14 years old and should be replaced every 10 years. I wanted to upgrade them all to smart smoke & monoxide alarms for about $1,000.

Does TurboTax or IRS follow a specific depreciation cycle or do I manually indicate "10-Year Depreciation for Smoke Alarm Replacement" somewhere?
Coleen3
Intuit Alumni

Investors & landlords

Rental property tends to wear out faster than normal so sometimes the IRS gives you a break on it.
• 5-year property. This class includes computers and peripheral equipment, office machinery (typewriters, calculators, copiers, etc.), automobiles, and light trucks.
This class also includes appliances, carpeting, and furniture used in a residential rental real estate activity.
Depreciation is limited on automobiles and other property used for transportation; computers and related peripheral equipment; and property of a type generally used for entertainment, recreation, or amusement. See chapter 5 of Pub. 946.

Investors & landlords

Ah ok! Thank you!

This looks like MACRS and not straight-line. I work as an IT procurement & asset manager so I am starting to see similarities.

Much appreciated.
Coleen3
Intuit Alumni

Investors & landlords

My pleasure.