I am a landlord of 3 properties. I have always been able to use the special loss rules, to adjust my non-passive income. It's always been a nice little deduction to help offset. last year I was married. My impatient wife filed taxes for last year, very early. She likes to get her money, and she insisted on filing Married/Separately, before I had time to sit down and figure things out. I am about to file my taxes, and you can guess where this is going...I cannot claim any special loss on my rental property, because I just discovered the rule that you cannot use passive-loss to offset non-passive income if, and only if, you file Married filing Separately, and you lived together at all through the year. First, can someone explain the purpose of this rule to me. I'm racking my brain why this one rule, that ruins everything for me now, is there. Why filing Married and Jointly or Married and separately, has anything to do with real estate that I've claimed losses on for 20 years? Just curious as to the intent of this? 2nd, what are my options? Can I carry over the loss to next year, when we will hopefully file jointly, and then I can use that loss to offset? Can my wife go back and amend her taxes this year, and change it to married filing jointly, if we find that productive. I did sell a rental property this year, and because of depreciation, may owe money on that, even though I sold it a a big loss. Can that be offset by passive-loss, or is that capital gains, and so no. Sorry if I may be using the wrong terms here exactly, my brain is burnt out from researching why non of my rental losses were being applied to my tax return, and I just kept getting a big fat zero. Thank you for any advice.
