The most likely reason you're not seeing an impact on your taxes is your Income level.
If you have a loss from your rental real estate activity, two sets of rules may limit the amount of loss you can deduct. You
must consider these rules in the order shown below.
-
At-risk rules. These rules are applied first if there is investment in your rental real estate activity for which you are
not at risk. This applies only if the real property was placed in service after 1986.
-
Passive activity limits. Generally, rental real
estate activities are considered passive activities and losses are not
deductible
unless you have income from other passive
activities to offset them. However, there are exceptions.
If you or your spouse actively participated in a passive rental real
estate activity, you may be able to deduct up to $25,000
of loss from the activity from your nonpassive income.
This
special allowance is an exception to the general rule disallowing
losses in excess of income from passive activities. The maximum special allowance is:
-
$25,000 for single individuals and married individuals filing a joint return for the tax year,
-
$12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times
during the tax year, and
If your modified adjusted gross income (MAGI) is $100,000 or less
($50,000 or less if married filing separately),
you can deduct your loss up to the amount specified
above. If your MAGI is more than $100,000 (more than $50,000 if married
filing separately), your special allowance is limited
to 50% of the difference between $150,000 ($75,000 if married filing
separately) and your MAGI.
Generally, if your MAGI is $150,000 or more
($75,000 or more if you are married filing separately), there is no
special
allowance and you cannot deduct your loss.
For more information, see IRS Pub 527 - Residential Rental Property
