Using excess depreciation against other business (S-CORP)?

[Brady Huf]

I have an S-CORP that I run my video production company through.

I am planning to start an LLC to purchase my first investment property.

Question 1:

Can I use excess depreciation from that property to offset taxes paid through my day job S-CORP?

I've seen something about passive income can be used if you make under $100,000 up to $25,000?

Question 2:

Can I somehow use this for my wife's income. She is a nurse. Maybe having her named in the LLC?

May be some dumb questions, just bear with me. I'm 23 and learning how this works...

I'll be taking to a CPA soon, but I want to get a bit better handle on first.

[Natalie Kolodij]

Originally posted by @Brady Huf:

I have an S-CORP that I run my video production company through.

I am planning to start an LLC to purchase my first investment property.

Question 1:

Can I use excess depreciation from that property to offset taxes paid through my day job S-CORP?

I've seen something about passive income can be used if you make under $100,000 up to $25,000?

Question 2:

Can I somehow use this for my wife's income. She is a nurse. Maybe having her named in the LLC?

May be some dumb questions, just bear with me. I'm 23 and learning how this works...

I'll be taking to a CPA soon, but I want to get a bit better handle on first.

I would recommend setting up with a RE specialized tax pro, lots of good options on BP, there's a lot to unpack in this post. 

So we've got 2 income/loss types- Active and Passive

Entities don't impact this. Whether income is in an S corp, LLC, Partnership ect doesn't change the type. Who's name is on it doesn't change it either.

 I'm not sure what you mean by "excess depreciation" You get  to take $X amount of depreciation annually against each rental. That along with other expenses may or may not generate a loss. 

Rental losses are passive. 

Passive losses are only allowed to reduce/offset passive income. 

The exception is a small taxpayer exclusion- if your and your wife's Modified AGI on your 1040 is under $100k then you're allowed to utilize your passive losses against other active/ordinary income on your 1040. That includes w2 income, flow through income from the K-1 from the S corp, ect. 

As your income gets above $100k that $25k is reduced. Once you reach $150k no losses are allowed and they carry forward to a year when they can be utilized.