Why did not my property loss carryover offset my passive property income this year? I have multiple properties

Forum|Forum|1 year ago
February 4, 2025
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why did not my property loss carryover offset my property income this year? I have several properties, some with losses others with net income. when adding up losses and income across all properties, I end up with passive loss. So, does passive loss carryover apply to the total sum of all properties? or should passive loss carryover on. property A apply towards passive income on property A this year?

AmyC

Employee

The total of all your properties income and loss is summed up on Sch E. If you have a gain, it goes to your income. If you have a loss, it is limited to $25,000 or less, based on your income and filing status. If your income is high enough, you will just keep carrying the loss over until you sell or have lower income.

The total carryover will accumulate in the program but you need to track each property and its loss separately.

Reference limitations here.

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a_sal6Author

thank you for the response. I tried to play with one of the properties and inflated the income so that i end up with a positive income overall across my 5 properties. What happened was interesting. I ended with slightly bigger tax refund due to QBI. I was able to deduct 20% of my rental properties income from my overall taxable income. But how come my taxable income didn’t increase by the rental income amount (let’s say $10k)? Instead, my taxable income was reduced by $2k (20% rental income)? Did my rental income get offset by last year’s carryover loss?

AmyC

Employee

Yes. The passive loss is used against the passive income. Great job learning how the parts move around! QBI is set to expire after 2025, unless Congress extends it.

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