Deductible Rental Real Estate Loss is significantly less than my total rental loss

Forum|Forum|1 year ago
March 1, 2025
2 replies
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I am doing a MFS tax return and my AGI is ~$60k. My total rental loss on schedule E is $17k, but TurboTax is only letting me deduct $1.2k worth of it. Why is this? I do not materially participate in the rental property.

IsabellaG

Employee

It depends. The special rental loss allowance for Residential Real Estate with active participation is not available for taxpayers whose filing status is Married, Filing Separately if you lived with your spouse at any point during the year. See this from the IRS.

For Married, Filing Separate individuals who lived apart all year, If your modified adjusted gross income is more than $50,000 but less than $75,000 , your special allowance is limited to 50% of the difference between $75,000 and your modified adjusted gross income. In your case, that would be $12,500.

I'm not sure why you are seeing an allowable loss of $1,200, but if you provide more information I would be happy to help. It's possible that your Modified Adjusted Gross Income is higher than the $60,000.

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AmeliesUncle

Were there any personal-use days?