Why my net negative income from rental property is not affecting the total income? I have a net loss from rental property of 10000, but the net income was not affected.

[xww0701]

I think the netincome should be reduced by 10000, however the online version did not. Is this a bug?

[Anita01]

Is your total income other then the rental $150,000 or more?  Was the property rented at fair market all year?Were you active?

[xww0701]

Thanks for your answer. The total income is above $150,000. I was active participant, but when it asked me whether i was real estate professional, i said no.  The property was rented at fair market price. It was rented for 249 days, and was vacant for a few months. I believe in the question of how many day it was rented at fair market price, I indicated 320 days, which is the length of time the house is available for rent.

[Anita01 · Accepted solution]

Even for active participants, the maximum loss you can take is $25,000 per year.  That amount declines as your other income hits $100,000, and reaches zero at $150,000 in other income.  At that point, any loss for the year is carried forward until such time as the property is sold in a fully taxable sale.  

If you are Married Filing Separately, no loss is allowed if you lived with your spouse at any time during the year and only $12,500 maximum if you lived apart all year and met all the other conditions.