topic Passive income from rental properties in Investors & landlords

Passive income from rental properties

bonairerob — Sat, 01 Jun 2019 01:36:38 GMT

I am retired and have a rental property. The rule on passive loss says I must work 50% of work time to be a property manager. If this is my only work , would I then be considered a property manager and able to deduct up to $25000 a year?

Be careful not to confuse the rules regarding a real esta...

re2boys — Sat, 01 Jun 2019 01:36:39 GMT

Be careful not to confuse the rules regarding a real estate professional (outlined by @SweetieJean) and the Exception for Certain Rental Real Estate Activities passive loss rules. If you meet the latter criteria, you can deduct up to $25,000 in losses each year. Essentially, you must actively participate in your rental activities, have an AGI under $100K ($50K if MFS), and some other conditions as described in Schedule E instructions, page E-3,4.

https://www.irs.gov/pub/irs-pdf/i1040se.pdf

To qualify as a real estate professional, the taxpayer mu...

SweetieJean — Sat, 01 Jun 2019 01:36:41 GMT

To qualify as a real estate professional, the taxpayer must spend:
1. more than 50 percent of his/her time in real estate activities; AND,
2. more than 750 hours in real estate activities.
A real estate professional must materially participate in each rental activity for the loss to be deductible

https://www.irs.gov/businesses/small-businesses-self-employed/passive-activity-loss-atg-chapter-2-re...