I have rental property loss on Schedule E. Since my income is high and I can’t take a deduction for my regular tax. Can I deduct anything from my rental property for AMT?

[anime2u]

I have rental property loss on Schedule E. Since my modified adjusted gross income is high and I can’t take a deduction from my rental property loss for my regular tax. I read the article “Alternative Minimum Tax: Common Questions” from Turbotax (https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Return/Alternative-Minimum-Tax--Common-Questi...), it mentions “Taxes deductible on a business schedule (Schedule C), rental schedule (Schedule E), or farm schedule (Schedule F or Form 4835) are allowed for the AMT.” So I wonder whether I can deduct anything from my rental property for my AMT. If so, what kind of deductions I could use? Thank you in advance.

[Carl]

Since rental income is passive, so are rental expenses. Passive losses can only be deducted from passive income. In the case of rental property, it is very common to show a loss every year, which is carried over to the next year and deducted if there in the passive income to deduct it from.

But in the case of rentals, it's more common for those passive loss carryovers to add up year to year. You just keep carrying them over. The program does this for you automatically, if you use the program the way it is designed and intended to be used. You will not realize your losses until the year you sell or otherwise dispose of the property.

In your case, since your AGI is to high, your unallowed losses are carried over to next year. Then if your AGI is lower, *and* you have the rental income from which to deduct those losses, they'll be deducted next year. Otherwise, they just carry over year to year until the tax year you sell or otherwise dispose of the property. This has nothing to do with AMT.

[tnfarmer01]

What tax year did this regulation take effect?

[tagteam]

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@tnfarmer01 wrote:

What tax year did this regulation take effect?

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Section 469 of the Code, that addresses passive activity losses, has been around since the 1980's.