Schedule E Losses on Rental Property

[kakar5]

In August, we purchased a home on the lake for the sole purpose of renting as a short term rental.  While it was available to rent from September forward, there was only a small amount of income due to it being the slow season.  We took the opportunity to do renovations and ready it for rental in the spring.  With low income and high costs, there is a loss but because I have a full time job and have Taxable Income over 150,000 it does not allow for any loss to be applied to taxes I owe.  How can I use the loss, at least a portion in 2021, and have a carryover for future years?

[KrisD15]

Short-term rentals COULD be reported on Schedule C If there is substantial involvement, such as getting ready weekly, replenishing soaps and linens, that sort of thing.

If reported as a business, there would be no passive loss limit, however you don't say where you live. If the lake home is in another state, you probably do not engage with it as a business. 

As a rental, there would be no other way of claiming the loss on your 2021 return.