Business shows no income

It depends. There are two factors that determine allowable loss.

1. First is 'active participation' - you must be sure to answer this question correctly with a 'Yes' in the rental activity if you make all the decisions about the rental, even if you have a property manager.
2. Second is income - Maximum special allowance. The maximum special allowance is: 
   • • $25,000 for single individuals and married individuals filing a joint return for the tax year, 
   • • $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and 
   • • $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified. 
     • If your MAGI is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above. If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI. Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance.

If your income below the is over the threshold above for your filing status your loss will be suspended and carried forward.

• IRS Publication 527

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• Active participation (be sure you have selected this).