Vacation Home Rental Loss Limitation - Mortgage Interest and Real Estate Taxes

Based on my research and guidance understanding, a vacation rental should not result in deductible losses against your AGI (but rather carried forward).

For my vacation rental, which I use more than 15 days, TT is taking the rental portion of the mortgage interest and taxes, netting against rental income, and taking the loss against AGI. My AGI exceeds the allowable deduction limit and I'm not a real estate professional or active participant.

I had the same situation last year in which I had a CPA file my taxes. All passive losses were carried over and the Schedule E was netted to 0. I've attempted to override TT but the vacation loss limitation field on the worksheet is grayed out so it results in understated carryover losses if I just adjust the Schedule E worksheet.

Please advise.

posted