I Have -$51,146.00 in Net Income of three Rental properties. My Federal Refund And State Balance due has not moved plus or minus. Is there a cap of what I can claim?

[IsabellaG · Accepted solution]

Yes, there is a loss limitation of $25,000 on Rental Real Estate.

Rental activities are considered to be Passive Activities, and Passive Losses are generally only able to offset Passive Income. But in the case of Rental Real Estate, a $25,000 loss is allowed against other types of  income as long as you actively participate in the rental activity. See this for details about Rental Property.

In addition,the $25,000 loss allowance is phased out when your modified adjusted gross income (MAGI) is between $100,000 and $150,000. There is no loss allowed for MAGI  above $150,000 (for a joint return). See IRS Publication 925.

Losses that are disallowed in 2017 can be carried forward to future tax years, and either deducted against future income, or used when you sell the properties.