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Updated almost 2 years ago,

User Stats

109
Posts
37
Votes
Pierre E.
Pro Member
  • Washington, DC
37
Votes |
109
Posts

STR tax loss - effect on 401k contributions from Depreciation

Pierre E.
Pro Member
  • Washington, DC
Posted

Could deducting real estate losses against your earned income affect the amount of income you can place into a 401k or Solo 401k?

Example: if you claim REPS status or you use the STR active status to deduct a total of 100k in tax losses from your earned active regular work income from your job as a plumber contractor where you earned 100k (in net business income after business expenses etc)

Such that your tax bill is zero, and you normally contribute to a solo 401k as employer would that prevent you from making any contributions?

For additional technicalities lets assume you work for a company w2 as a plumber and maxed out your company 401k and also work for yourself on the side, so the only way you can save that income is to contribute as an employer.

Main question: when deducting rental tax losses from your earned income does come before or after your 401k savings on the above/below the line list of tax deductions.

Note: the above is not my actual personal scenario I gave it to help illustrate the question I am asking. Not seeking tax advice, trying to understand how deductions work.

  • Pierre E.
  • Loading replies...