topic Rental property depreciation carryover in Investors & landlords

Rental property depreciation carryover

ktchiu — Tue, 24 Feb 2026 07:14:05 GMT

I own a rental property which make a small operating profit. Every year when I file the tax return which includes depreciation I suffer a loss. However schedule E treats all losses as zero which I cannot use to reduce my other incomes.

I expect the rental property will eventually make more money which the depreciation will be useful. How do I carryover my depreciation to use in future years?

Thanks,

Re: Rental property depreciation carryover

Anonymous_ — Fri, 29 Sep 2023 14:52:42 GMT

In the typical scenario, which most likely is applicable in your case, passive losses are suspended and carried forward to future tax years.

You should see Form 8582 in your return package which should show the disallowed loss for the current tax year.

Re: Rental property depreciation carryover

Mike9241 — Fri, 29 Sep 2023 16:21:32 GMT

if you used Turbotax or even other self-prepare apps, those suspended passive losses should already be reflected as carryovers on the schedule E worksheets and can be found on form 8582. at such time as income is increased some of those suspended losses will be applied to reduce the net rental income (not below zero unless the special rule applies). there is a special rule that allows up to $25,000 in passive rental losses each year provided your adjusted gross income is less than $150,000 and you actively participate. the computation for this limitation is also done on form 8582.

Re: Rental property depreciation carryover

ktchiu — Sat, 30 Sep 2023 14:36:56 GMT

Thanks Mike. I found the information I need at form 8582.

Re: Rental property depreciation carryover

ktchiu — Sat, 30 Sep 2023 14:38:23 GMT

Thanks Champ. I found the info I need at form 8582.