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Updated over 5 years ago on . Most recent reply
$52k loss on schedule E. But only reduce my WG-2 by $6k???
Schedule E shows $52k in losses for 6 properties. Due to mortgage interest, depreciation, repairs, supplies, maint fee, etc. But allof that only reduced my earn income by $6k. Sounds like I’m doing something wrong. Thoughts??? Any help would be appreciated. Thank you
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#5 Tax, SDIRAs & Cost Segregation Contributor
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- Atlanta, GA
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#5 Tax, SDIRAs & Cost Segregation Contributor
- Accountant
- Atlanta, GA
It's impossible to give you a definite answer without seeing the return and discussing your facts and cirucmstances.
However --
If (1) you are not a real estate professional and (2) your modified AGI is between $100k and $150k, it sounds like the return is calculating correctly.
RE losses are passive in nature if you're not an RE pro. There is a $25k passive loss allowance for taxpayers that actively participate in a rental real estate activity if their modified AGI is less than $100k. The allowance phases out for MAGIs over $100k and is completely gone at or above $150k.