Rental Property losses

Forum|Forum|2 years ago
April 6, 2024
2 replies
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Why can't we take the rental loss this year, when we could last year and in both years earned income was in excess of $150k? Property was only rented for one month (December) of 2022 and was rented for the full year 2023.

ThomasM125

Residential rental real estate losses are considered passive losses. Passive losses are only allowed to offset passive income, with a special exemption of up to $25,000 for rental property losses if your income is below $150,000 if filing married-joint, per this from the Pub 8582 instructions :

I'm not sure why your loss was allowed in the previous year but it may be because you had passive income to offset it. You can look on form 8582 in your 2022 return to see how your passive losses where handled.

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AmeliesUncle

I suspect that you accidently entered some "personal days" last year, which may have allowed the loss. However, that would be wrong (you only enter personal days AFTER it was converted to a rental), so you may need to amend your 2022 tax return.