Can I carryover rental property expenses into next year's tax filing?

[thorntonmu]

I spent a lot of money on my rental property this summer preparing to sell it. When it didn't sell, we rented it out again. The amount of money spent remodeling it well exceed the income generated by the rental. Can I push part of these expenses into next year's tax filing?

[lottiecheadle]

I have this same problem I spent around 40,000 not very much income since I spent 6 month update and repair it

[DS30]

It depends,

First of all, if any of these repairs was considered a capital improvement, you will need to include them in the basis of the property. (Although there are some new rules that give limited circumstances when capital improvements can be expensed. Please refer to this IRS link concerning this issue: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tangible-Property-Final-Regulations.

Second, if you are an active participant in your rental property and your modified adjusted gross income in below a certain threshold (less than $100,000), you are allowed each year to deduct up to $25,000 of passive rental losses against ordinary income in the current year. (Please refer to this IRS link for more information about this special allowance under Reporting Rental Income, Expenses and Losses)

Finally, if you are not an active participant, your income is above the special allowance threshold and you have no other passive income to offset your passive rental losses, then any nondeductible passive losses from your rental will be carried forward to be used to offset future year's passive income.

So if you select that you are not an active participant, you can carryover your passive rental losses to a future year.