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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_

Level 15

@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.

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

Woodman228Author

Level 4

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_

Level 15

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.