Rental Property--last year I was able to deduct $12,132 from rental income. This year it's only $2,432 though my actual expenditures are almost the same. How can I fix?

[Coleen3 · Accepted solution]

Passive losses from rental property may be limited for income over $100,000.

Maximum special allowance.   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
• $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified.

  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.