How can I deduct rental expenses that exceed rental income in same year?

[ray117]

I have a Florida rental property that is rented seasonally. My gross rental in 2015 was $6000, my expenses (furniture, appliances, etc.) was about $19,000 but the expenses are being limited to the $6000. rental income. How can I deduct the remaining $13,000 expenses that I have incurred?      

[ChelsiE2 · Accepted solution]

The IRS will only allows a deduction of Rental Expenses in excess of Rental Income when the property owner is said to be an Active Participant in the rental property.

The IRS defines Active Participation as follows: "You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fidesense. Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions." (From: IRS Publication 527)

If you believe you are an Active Participant in this rental property, you'll need to indicate so in TurboTax.  Navigate back to your rental input and find the screen in the attachment below.  Here you'll need to select Yes.  You can also use the Easy Guide to help you.