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r-c
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Turbotax recorded $21K rental property income Sch E, but did not ask expenses. Is that because my total income is +$150,000 & therefore no deductions are permitted?

I’m addressing only expenses associated with renting the condo.  Turbotax did state that due to my total income in excess of $150,000, none of the expenses would be deductible.  Also the Schedule E indicates non passive – status, but I answered that I did not spend over 750 hrs per year participating.  I/TurboTax has completed all tax calculations, to include error checking and is ready to file.  I just want to ensure the associated expenses were not recorded because there was no deduction as our income was above the threshold.  Thanks - Rudy

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view2
New Member

Turbotax recorded $21K rental property income Sch E, but did not ask expenses. Is that because my total income is +$150,000 & therefore no deductions are permitted?

With income in excess of $150,000 you can deduct expenses, but you cannot take a loss on the property, as this is classified as a passive loss.  So your deductions are limited to your income from the rental.  Tax law limits these losses.

However, unused losses do carry forward and can be applied to future years.  If you sell the property, any unused losses can be used to increase the basis of the property at sale.  So, you do get the losses, but they are deferred.

Please complete the rental section to file a Schedule E so that you will be able to claim all related expenses and depreciation , so if any passive loss , that can be carried forth  even  up to the time the property is sold.

"Active participation"  .Renting out real estate property is generally considered a passive activity.The term "active participation" is a less stringent standard than "material participation."

You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions.

Try this path to review questions and answer questions as to active participation and  the entering of allowed expenses at your rental summary screen.

federal taxes/ wages & income/

I'll chose what Work on.

continue through to

your rental summary

NOTE:::   Vacation rental  with personal use will have a different  outcome than a regular residential rental without personal use.

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1 Reply
view2
New Member

Turbotax recorded $21K rental property income Sch E, but did not ask expenses. Is that because my total income is +$150,000 & therefore no deductions are permitted?

With income in excess of $150,000 you can deduct expenses, but you cannot take a loss on the property, as this is classified as a passive loss.  So your deductions are limited to your income from the rental.  Tax law limits these losses.

However, unused losses do carry forward and can be applied to future years.  If you sell the property, any unused losses can be used to increase the basis of the property at sale.  So, you do get the losses, but they are deferred.

Please complete the rental section to file a Schedule E so that you will be able to claim all related expenses and depreciation , so if any passive loss , that can be carried forth  even  up to the time the property is sold.

"Active participation"  .Renting out real estate property is generally considered a passive activity.The term "active participation" is a less stringent standard than "material participation."

You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions.

Try this path to review questions and answer questions as to active participation and  the entering of allowed expenses at your rental summary screen.

federal taxes/ wages & income/

I'll chose what Work on.

continue through to

your rental summary

NOTE:::   Vacation rental  with personal use will have a different  outcome than a regular residential rental without personal use.

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