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A
allie-mcwhorter
Level 2
February 21, 2020
Question

Why is the tax return not limiting rental loss to $25,000? It is allowing the full loss that should be carried forward.

  • February 21, 2020
  • 2 replies
  • 18 views
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2 replies

T
TaxGuyBill
Level 15
February 21, 2020

Was the house sold?

Was there other passive income?

Did you check the box that they are a Real Estate Professional?

    A
    allie-mcwhorterAuthor
    Level 2
    February 22, 2020

    There isn't any other passive income and the professional box is checked. I know that they should be limited to the $25k and not report the full loss of 51k. Any other thoughts?

    T
    TaxGuyBill
    Level 15
    February 22, 2020
    @allie-mcwhorter wrote:

    and the professional box is checked.

     

    If they are a Real Estate Professional and they "Materially Participate" in the rental, there is no limit.  They are allowed to take the entire loss.

    So just double-check that they actually DO qualify as a Real Estate Professional.

    https://www.irs.gov/publications/p925#en_US_2018_publink1000104591

      Accountant-Man
      Accountant-Man
      Level 13
      February 21, 2020

      NMI.

      Real estate professional?

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