topic two rental properties - one with income, one with loss in Investors & landlords

two rental properties - one with income, one with loss

dglbc — Mon, 23 Feb 2026 09:40:33 GMT

I own two rental properties 100% - a single family home in Ohio and land in PA. The Ohio property generated a significant loss and the PA property generated significant income. I get that the loss (if by itself) would be disallowed as passive . . . but can't I net it with the other property? Why not?

Thanks in advance!

Re: two rental properties - one with income, one with loss

Carl — Tue, 31 Jan 2023 03:24:07 GMT

Just a wild guess here, but I'm guessing that one is residential rental real estate, and the other is business rental real estate. Is that so?

Re: two rental properties - one with income, one with loss

Anonymous_ — Tue, 31 Jan 2023 03:29:44 GMT

Land is in a strange category thanks to, among other things, Section 1.469-2T.

A loss on the rental of land is a passive loss, but a net profit from the rental of land is nonpassive income, the latter of which cannot be offset by passive losses.

Re: two rental properties - one with income, one with loss

dglbc — Wed, 01 Feb 2023 01:24:29 GMT

Thank you so much for your help, Carl. I believe Tagteam found the right answer . . . it doesn't look like I can net them . . . boo! 😀

Re: two rental properties - one with income, one with loss

dglbc — Wed, 01 Feb 2023 01:26:29 GMT

Thank you so much Tagteam. I read through the offending Reg Sec and regrettably (at least for my pocketbook) I agree with you. Nonetheless, I do appreciate the quick help.