Maximum Losses allowed for rental losses?

Kathy · #1 (**permalink**) 01-24-2007, 10:22 AM

What are the maximum losses that I can deduct for my rental property activities for 2006?

TaxGuru · #2 (**permalink**) 01-25-2007, 09:26 PM

In general, per IRS rules, the maximum losses you can deduct for rental losses are $25,000 for a jointly filed tax return whose adjusted gross income (AGI) does not exceed $150,000.

If the AGI exceeds $150,000 then you cannot deduct the losses.

Kathy · #3 (**permalink**) 03-05-2007, 03:15 PM

Per your last post, you mentioned if my AGI was greater than 150,000, my rental losses would not be deductible.

What happens to these losses? Can I ever be able to deduct them? How about if I sell my property, can I use them then?

TaxGuru · #4 (**permalink**) 03-05-2007, 05:46 PM

Kathy,

These losses are suspended for future years to be offset against other passive actiity gains from your current and other rental activities.

These losses are not lost, and if you do not have passive gains in the future activities they are aggregated and were you to ever sell or dispose of these properties, the losses become unsuspended and increase your basis in the investment property thereby potentially lowering your taxable gain.

cfpclu · #5 (**permalink**) 07-30-2007, 04:11 PM

that is the best quick answer to this question I have seen. Section 469 of the code can be tough.