Carl
Level 15

Investors & landlords

When a married couple chooses to file separate tax returns, they both *automatically* lose a large number of tax credits and deductions they would otherwise qualify for if they filed separate. Additionally, the allowed SALT limits for both are cut in half.

Your rental expenses filng MFS will also still not be deductible. See IRS Pub 527 at https://www.irs.gov/pub/irs-prior/p527--2019.pdf  page 13, "Exception for rental real estate with active participation" and pay particular attention to the caution note which reads, "he special allowance isn’t available if you were married, lived with your spouse at any time during the year, and are filing a separate return."

Also, for the rental losses see page 14, first column, about halfway down, "Maximum special allowance"

It's best to actually read the entire section starting on page 13 "Passive Activity Limits" so you get things in the right context.