Our W2 income is 150k+, will passive losses carry forward for future use when W2 income is lower?

@Samantha Kincaid Yes unless you have other passive income or utilize other strategies.

@Samantha KincaidYes, the passive losses will carry forward.You can utilize the passive losses when you either dispose of the property, generate passive income or have your income lowered.

RE Pro has nothing to do with being an agent. There're basically 3 requirements, however each one is more complicated than it seems at first. 1. You need to "materially participate" in your real estate business. In plain English, it means being hands-on, as opposed to merely giving your money to someone else to invest. 2. 750 hours of real estate work per year, which is about 15 hours per week. It has to be real work, as opposed to watching podcasts, and it has to be documented (logged). 3. More hours spent in real estate than doing anything else for money - like other businesses or jobs. Like I mentioned, it has a lot of small print, so better get professional advice if you believe you or your spouse might meet these 3 tests.

@Daniel Chun Check the IRS definition of "real estate professional". The spouse has to contribute at least 750 hours to the real estate rental business and not work more in something else. It's complicated and definitely have a CPA prepare your return if electing this. And document those 750 hours thoroughly! - Tom

What if you are a married couple and one has a W2 job and one is a real estate professional. How do they define real estate professional? Do they need to be an agent? Investing? etc?

You. Not only when it is lower. Also when you might have other/ additional passive income or when you dispose the property. If you are a real estate professional, there is no limitation.

W2 income is 150k+, will passive losses carry forward?W2 income is 150k+, will passive losses carry forward?

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W2 income is 150k+, will passive losses carry forward?

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