Earnings too high to claim passive losses?

[Loic Assobmo]

Earnings too high to claim passive losses?

so what happens if you have lots of passive losses on real estate - but your active income is over 150k? is there a way to still claim those loses if you are a full time employer in healthcare.

[Natalie Kolodij]

Starting an LLC won't make your losses available.

Passive losses are treated as such no matter where they generate- so if your LLC genrates a passive loss and it flows to your 1040 via the K1- it's still limited there. This doesn't change any thing on that side.

Your CPA gave you bad advice- the LLC isn't allowing your passive losses to reduce your ordinary income so it didn't change this circumstance.

If your Income is over $150k you have a few options 

-See if you or your spouse can qualify as RE pro

-Loss bank- those losses get saved up, use to offset a gain from a trade, trade into more profitable properties, sell stocks, ect 

- Generate passive income which passive losses can be utilized against .