Schedule #

[Woodman228]

We have rental property and I entered the information for Rentals.  Line 22 has -25,000 - Can I deduct this for 2019.  We recently retired and my income dropped so I am checking if this is an error?  Thank you.

[Anonymous_]

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@Woodman228 wrote:

We have rental property and I entered the information for Rentals.  Line 22 has -25,000 - Can I deduct this for 2019.  We recently retired and my income dropped so I am checking if this is an error?  Thank you.

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Yes, you most likely can deduct the $25,000 (which the IRS calls the special allowance) provided you do not exceed the income criteria and either you or your spouse actively participate in the rental activity.

See https://www.irs.gov/publications/p527#en_US_2018_publink1000219124

[Woodman228]

Thats awesome.     One more question to clarify, it appears it took previous losses from previous tax returns to get to the -25,000 dollars (it was actually -33,000).    

Does this sound accurate please?   Thanks again for the quick response.

[Anonymous_]

You stated in your original post that your income dropped this year so your losses were probably suspended in  previous years and released as a result of the drop in MAGI.

The limit for the special allowance in any given tax year is, obviously, $25,000.

[Woodman228]

Just to need to clarify.

My losses for this year are -4400.     Correct, previous years we had losses so were not able to deduct due our MAGI.   

So I assume the losses can be carried forward to this tax year?    

Thanks again.

[Anonymous_]

Yes, suspended passive losses are carried forward to subsequent tax years.