Using a management office manager my rental property. But I made all decision.Am I qualified the special allowance of $25K?

[mmwu2013]

I have a rental property in another state and hiring a management to take care of the property. But I make all the decision including selecting tenant, decide the rental rate and leasing agreement, checking and taking care all of bills and review the statements related. Am I qualified for the special allowance of $25,000 to deduct the rental income? Thanks.

[Coleen3 · Accepted solution]

Yes, as long as you actively participate.

However, if you meet the active participation test, you can subtract up to $25,000 in passive losses from your non-passive income. To meet the active participation rule you must own at least 10 percent of the property and have made management decisions or arranged for others to provide services in a significant and bona fide sense. Examples of active participation, according to the IRS, include advertising rentals, collecting rent, making repairs or hiring someone to make repairs. (from The Definition of Active Participation in a Rental Property)