royalty income on rental property is 0 (expected l...
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest second stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
Level 2

royalty income on rental property is 0 (expected loss) although MAGI is below $150K

Hello,

 

I have a rental property that always generated a loss in the previous years (mortgage interest, depreciation, expenses, ..) . However, after putting in the numbers this year, the expenses field matches the rental income and the overall result is zero.

 

My MAGI is below $150K although it is over 100. Why are there no losses allowed? 

6 Replies
Level 15

royalty income on rental property is 0 (expected loss) although MAGI is below $150K

Did you indicate in the property profile section that you actively participate? If you 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.

Level 2

royalty income on rental property is 0 (expected loss) although MAGI is below $150K

Yes, I did select that I actively participate.

Level 15

royalty income on rental property is 0 (expected loss) although MAGI is below $150K

So your passive losses up to $25,000 in excess of the passive income, were deducted from your "other ordinary" income, leaving no more losses to carry over, apparently.

 

Level 11

royalty income on rental property is 0 (expected loss) although MAGI is below $150K

Did you enter any personal use days for the rental?

 

Is Line 20 of Schedule E equal to the 3 of Schedule E?

Level 2

royalty income on rental property is 0 (expected loss) although MAGI is below $150K

I did! We spent several weeks there remodeling. I included all that time in personal use days. I assume that is a no go?

Level 2

royalty income on rental property is 0 (expected loss) although MAGI is below $150K

OK, that was my mistake to put too many "personal use days" where those days included fix-up days

 

Looking at https://www.kiplinger.com/article/taxes/t010-c000-s002-5-irs-rules-for-renting-out-your-vacation-hom...

"

5. If you limit your personal use to 14 days or 10% of the time the vacation home is rented, it is considered a business. You can deduct expenses and, depending on your income, you may be able to deduct up to $25,000 in losses each year. That's why many vacation homeowners hold down leisure use and spend lots of time "maintaining" the property; fix-up days don't count as personal use.

"

Dynamic Ads
v
Privacy Settings