topic Schedule # in Retirement tax questions

Schedule #

Woodman228 — Sat, 16 Nov 2019 20:04:56 GMT

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.

Re: Schedule #

Anonymous_ — Sat, 16 Nov 2019 20:23:58 GMT

@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

Re: Schedule #

Woodman228 — Sat, 16 Nov 2019 20:58:31 GMT

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.

Re: Schedule #

Anonymous_ — Sat, 16 Nov 2019 21:08:23 GMT

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.

Re: Schedule #

Woodman228 — Sat, 16 Nov 2019 21:32:45 GMT

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.

Re: Schedule #

Anonymous_ — Sat, 16 Nov 2019 21:46:29 GMT

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