two rental properties - one with income, one with loss

Forum|Forum|3 years ago
January 31, 2023
2 replies
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I own two rental properties 100% - a single family home in Ohio and land in PA. The Ohio property generated a significant loss and the PA property generated significant income. I get that the loss (if by itself) would be disallowed as passive . . . but can't I net it with the other property? Why not?

Thanks in advance!

Best answer by Anonymous_

Land is in a strange category thanks to, among other things, Section 1.469-2T.

A loss on the rental of land is a passive loss, but a net profit from the rental of land is nonpassive income, the latter of which cannot be offset by passive losses.

Carl11_2

Employee

Just a wild guess here, but I'm guessing that one is residential rental real estate, and the other is business rental real estate. Is that so?

dglbcAuthor

Thank you so much for your help, Carl. I believe Tagteam found the right answer . . . it doesn't look like I can net them . . . boo! 😀

Anonymous_Answer

Employee

Land is in a strange category thanks to, among other things, Section 1.469-2T.

A loss on the rental of land is a passive loss, but a net profit from the rental of land is nonpassive income, the latter of which cannot be offset by passive losses.

dglbcAuthor

Thank you so much Tagteam. I read through the offending Reg Sec and regrettably (at least for my pocketbook) I agree with you. Nonetheless, I do appreciate the quick help.