Rental Property Losses are not being deducted. I am not a business. I should be allowed to deduct loss from my rental home.

[labrady9cs2]

I have read the "Why my losses are not eligible for deductible" None of the options apply to me.

[MichaelMc · Accepted solution]

If you are an individual taxpayer having losses from residential rental property, and not in the business of managing and renting properties (a "real estate professional") your losses are passive losses, and only deductible against passive income. Passive losses cannot be deducted against ordinary income from employment, a business, or investments. If you had income from another rental property, the passive loss could be deducted against that income.

In the absence of passive income, your rental losses are "suspended" and you can't deduct them until you have passive income in future years or sell the property to an unrelated party.

For more information, please see IRS Pub. 527 Residential Rental Property.

[MichaelMc]

Edited for content. 13 March 2017, 5:14 AM PDT

[artofinsurance]

Can I deduct my rental property loss from my investment income? If so, would TurboTax do this automatically, or I need to take some special steps for this to happen?