Income Tax write off maximum is $10k?

Question

Hello,

So I recently found out that you can only write off $10k from local and state income tax. Does this mean I cannot write off depreciation + property tax + mortgage interest more than $10k?

Thanks in advance for your time!

Craig Jeppesen · Answer

The $10k is for schedule A not schedule E. There is no limit for your rentals; just your personal house.

Natalie Kolodij · Answer

So the first question relates to your PERSONAL itemized deductions- these are what you incur related to your primary home. Schedule E and rentals are all on Schedule E and totally separate. Totally different set of rules- I would suggest working with a tax pro who specializes in REI.

Using rental losses is a totally separate issue. Unrelated to it being on different forms per say.

Rentals are passive income.

W2s are Active/Ordinary income.

Normally losses from passive sources can only offset other passive income.

The IRS allows a small taxpayer exclusion, where if your income is under $100k - you are alowed to use up to $25k of passive/rental losses to offset your w2 income. This starts phasing out at $100k and at $150k those losses aren't allowed at all. All losses incurred will roll forward to a year in which they can be used.

Jordan Meyer · Answer

@Natalie Kolodij thank you! That is a huge help.

Jordan Meyer · Answer

Because they are different tax forms, can you not use your real estate tax write-offs to reduce your income tax from a W2 job?

@Craig Jeppesen

Jordan Meyer · Answer

Thanks so much @Craig Jeppesen! I was quite worried.

Income Tax write off maximum is $10k?

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