Rental property

[albertkalb]

I have a loss on rental property. Can I use it to offset capital gains on investments?

[RobertB4444]

A loss on rental property is used to offset regular income.  It will reduce your overall income provided you earn less than $100,000 per year or you are a real estate professional.  The maximum loss that you can deduct is $25,000.

[albertkalb]

I have earnings under 100K but my capital gains on investments are greater than 100K. Can I still deduct a loss on rental income?

[JohnB5677]

Capital gains are included in the modified adjusted gross income, or MAGI.

Under the passive activity rules, you can deduct up to $25,000 in passive losses against your ordinary income (W-2 wages) if your modified adjusted gross income (MAGI) is $100,000 or less.

This deduction phases out $1 for every $2 of MAGI above $100,000 until $150,000 when it is completely phased out.

[albertkalb]

Is the $100K MAGI threshold on passive loss for single or married filing jointly? I am married and over 60yrs. Can I carry the loss forward?

[RaifH]

The $100,000 MAGI threshold is for all filing statuses except for married filing separately which has a $50,000 threshold. The unused losses do carry forward to future years.

For more information, see the What are passive activities and how do they affect me? section of this article.