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Old 01-16-2007, 04:31 PM
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Residential Rental Deductions

Dear TaxGuru,

My husband and I own a small condo near the beach in New Jersey. The taxes and mortgage are high and it seems that we will be making a loss this year..

What can we write off for tax purposes? My CPA claims that due to our joint income being higher than 150k, we cannot write off our losses..

Please confirm if this is true and explain.

Tks

Kathy



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Old 01-16-2007, 09:07 PM
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Rental Real Estate Losses-Deductibility

Kathy,

You would will Schedule E reporting those rental transactions, that is reporting the total rental incomce, and rental expenses, (property taxes, mortgage interest, associatioin dues etc) in addition you can claim depreciation of the building.

If it appears that there is a net loss, this loss may be deductible subject to certain income limitation requirements. Your accountant is correct when he said that these losses are not deductible in the current year, if your adjusted gross income exceeds $150,000 for married filing jointly taxpayers!

However, these losses are suspended for use in future years and may be deductible against other passive income generated from other more profiable rental properties activities.



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