two rental properties - one with income, one with loss

[dglbc]

I own two rental properties 100% - a single family home in Ohio and land in PA.  The Ohio property generated a significant loss and the PA property generated significant income.  I get that the loss (if by itself) would be disallowed as passive . . . but can't I net it with the other property?  Why not?

Thanks in advance!

[Carl]

Just a wild guess here, but I'm guessing that one is residential rental real estate, and the other is business rental real estate. Is that so?

[Anonymous_ · Accepted solution]

Land is in a strange category thanks to, among other things, Section 1.469-2T.

A loss on the rental of land is a passive loss, but a net profit from the rental of land is nonpassive income, the latter of which cannot be offset by passive losses.

[dglbc]

Thank you so much for your help, Carl.  I believe Tagteam found the right answer . . . it doesn't look like I can net them . . . boo! 😀

[dglbc]

Thank you so much Tagteam.  I read through the offending Reg Sec and regrettably (at least for my pocketbook) I agree with you.  Nonetheless, I do appreciate the quick help.