I input all expenses for a rental property (mortgage interest, tax, repairs, etc.) but tax amount due is unchanged. To check, I set all to $0 and no change. Why is this?

Forum|Forum|7 years ago
June 6, 2019
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Best answer by sirshad1

It may be because your income is high, greater than $150,000 (please see below for limits) or you may not be actively participating in the rental activity. If you do actively participate in the rental activity, for example make decisions about tenants, etc. then you may deduct up to $25,000 from your ordinary income.

Generally, IRS considers rental real estate activities as passive activities which are subject to the passive activity loss rules. It means that a loss from a passive activity is not deductible unless you have income from another passive activity to offset it. Don't worry you don't lose that loss, it carries over to the next year or till you have passive income or when you sell the property.

But there is an exception, if you actively participate in a rental real estate activity, you can deduct up to $25,000 of your rental loss even though it’s passive. To actively participate means that you own at least 10% of the property, and you make major management decisions, such as approving new tenants, setting rental terms, approving improvements, etc.

But this exception phases out as your income rises. If you have modified Adjusted Gross Income over $100,000, the $25,000 rental real estate exception decreases by $0.50 for every dollar over $100,000. The exception is completely phased out when your modified adjusted gross income reaches $150,000.

Please see below on where to enter rental income and expenses in TurboTax:

https://ttlc.intuit.com/replies/3288530

For real estate professionals, see the rules below:

https://turbotax.intuit.com/tax-tips/self-employment-taxes/tax-tips-for-real-estate-agents-and-broke...

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sirshad1

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Employee Tax Expert