Is there a workaround to allow real estate investment property losses with an income above the allowed limit of $150k?

[5470689]

We had $40k of losses on a newly purchased cabin. It has rented well on AirBnB but we still had some significant losses. We're trying to figure out how to take advantage of these losses on our taxes.

[DavidD66]

No, there is not a work around that allows you take a loss on rental real estate if your AGI is above $150,000 and you don't qualify as a real estate professional.  

[5470689]

Thanks for the help. What if we have an LLC that we are running our rental unit through? Only one rental unit, no other income or activity goes through the LLC. Does that change anything?

[DavidD66]

No, the LLC does not change anything.  It does not change the nature of the real estate loss.  The general rule is that you can't take a passive activity loss.  It is an exception to the rule that allows you to take up to a $25,000 passive loss on rental real estate, if your modified adjusted gross income is $100,000 or less (phased out at $150,000).  There aren't any exceptions to the exception.      

[AmeliesUncle]

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@5470689 wrote:
We had $40k of losses.

It has rented well on AirBnB 

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A $40,000 loss is very high.  How did such a high loss occur?

Was the average stay 7 days or less?  Did you "Materially Participate" in the rental?  Was there any personal use?

https://www.irs.gov/publications/p925#en_US_2022_publink[phone number removed]