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Employee

Question

Rental income classified as non passive so I don't get the $25,000 deduction

Forum|Forum|2 years ago
October 15, 2023
1 reply
0 views

I have several "passive" rental properties on my taxes with income. Turbo Tax identified the income for only 2 properties as NPA non passive income and reduced my $25,000 deduction. I checked my answers to make sure they were identified as passive with active participation. What could be the reason for this? The 2 properties are land.

TurboTax Home & Biz Windows

See if this thread explains it. but classifying as non-passive with income means it won't affect the deductibility of losses from other passive rental activities. However, there is an Adjusted Gross Income limitation ($150K) for passive rental real estate losses with active participation (PRRELWAP) so review form 8582. go over the $150K AGI limit and you get no deduction for PRRELWAP

The Tricky Business of Classifying Income from Land Rents on Your Tax Return | Cohen & Company (cohencpa.com)

dydeanne55Author

Employee

Holy Tamole,

Yes the article is quite lengthy. I need to digest it further. Certainly answers the question!! Thanks!