Can I offset my W2 Income through Negative Rental Income?

Question

After depreciation, maintenance, property taxes, and insurance, I am technically losing money on this year's rental income (only rented my property during Q4). Can I offset my W2 income with this loss or would my net rental income be $0?

Natalie Kolodij · Answer

If your AGI is under $100k you can deduct up to $25,000 of rental losses against your w2 income.

If your AGI is over $100k and below $150k, you can deduct some, but it phases out. At $150k you can no longer deduct and those losses flow forward.

If your rental is a short-term < 7 day stay and you materially participate, you can deduct losses as it qualifies as non-passive

If you're a real estate professional per IRS status you can deduct losses as well sicne they're non-passive.

Rodolfo Palacios · Answer

"If your AGI is under $100k you can deduct up to $25,000 of rental losses against your w2 income."

is this with the up to 25k deduction or without it

Alex Fenske · Answer

Generally you cannot deduct passive losses against active income and instead have to carry-forward the losses. Under certain circumstances you may be able to deduct $25k against active income, and if you meet the IRS definition of a "real estate professional" then you can deduct unlimited passive losses against active income. More info is here, but please ask a CPA.

Can I offset my W2 Income through Negative Rental Income?

Can I offset my W2 Income through Negative Rental Income?

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