Question

Real Estate Professional Question

Forum|Forum|4 years ago
January 6, 2022
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Hello,

I was reading up on the tax implications of qualifying as a real estate professional for your rental property business. It is my understanding that if you have a loss, then you can deduct whatever is leftover from your W2 job when you are a real estate professional. My question is: Is this deduction instead of, or in addition to, taking either the standard or itemized deduction?

Meaning if you take the standard deduction on your W2 job, and then also want to carry over a rental property loss because you or your spouse is a real estate professional, does that come off your taxes owed in addition to your standard deduction?

Not A Product Question

A

Anonymous_

Employee

If you are a real estate professional and materially participate in your rental activities, then any net losses are not considered to be passive losses and may be deducted from all other income.

See https://www.irs.gov/publications/p925#en_US_2020_publink1000104591

The standard (or itemized) deduction does not displace the ability to deduct losses if you are a real estate professional who materially participates (i.e., the loss is in addition to the standard or itemized deduction).