Passive losses accrued for properties acquired in 2024 offset W2 income in 2025?

[Sachin S.]

Hello BP Experts, 

Let's say I acquired Long-term rental properties in 2024 and got the cost-seg/bonus depreciation study done for those properties in the same year. My understanding is  that these losses would remain passive-losses (if neither myself or my wife is claiming Real Estate Professional status for year 2024 when filing our tax-returns).

However, If my wife claims REP status in the year 2025 (she will work as Real Estate agent, materially participate, etc in managing these LTR
properties for 500 hrs, etc), can we carry forward the passive-losses from bonus depreciation from 2024, towards offsetting my W2 income to be earned in the year 2025?

I came across this link: https://semiretiredmd.com/primer-real-estate-professional/  where they say the answer is NO, I just want to validate my understanding, quoting relevant section from that link:

---------------------

"We often get the question – can you claim these suspended passive losses during a year you become a real estate professional? The answer is “no.” The reason is that these suspended losses are passive and they can never offset non-passive income like income from your clinical job, only passive income.

So it makes sense to be strategic and time your losses so they coincide with the year you become a real estate professional."

---------------------

[Michael Plaks]

Quote from @Sachin S.:

Thank you @Michael Plaks for the prompt response. A follow-up question: If I get the cost-segregation study done in year 2025, will that help ? (provided my spouse also get REPS in 2025)?

You're asking an accountant. Our standard answer to almost any tax question is "maybe, it depends." Which is true in your case.