Married and cant writeoff rentals anymore?

[Rocco Swinney]

Hi All!

I am getting married next year and I am trying to ensure all is in order. I always writeoff my rental losses each year

Ex. I make 80k and she makes 80k

My understanding is if your agi is under 100k you can fully deduct, over 100k partially deduct, over 150k then you cant deduct anything

These numbers are the same if you are single or married? If so, what do folks do so they can still writeoff?

As ex.80k single i can writeoff all of my rental losses, but once married (ex. 160k) we cant writeoff anything?

Note: I know most folks on here are about cashflow, which they might not have this. My approach has been different, as ive bought in good areas where i mostly break even and the goal is for them to be paidoff (then income streams) by retirement along with them appreciating too. I wanted to mention, as everyone has their approach that works for them, which id assume with this question that might get brought up about what am I doing

Thanks!

[Andrew Gingerich]

@Rocco Swinney This is a great question for a CPA. Which I am not. A couple thoughts come to mind. It may be worth filing separately even though you are married. My understanding is it is normally not worth it but there are a few cases where it might be useful to do this. Or, have you considered reducing your AGI through IRA's. You and your wife can each contribute 6000 a year for a total of 12,000. Is she employed with an employer that offers additional tax deferred accounts (401K? Health savings? Cafeteria plan?). Between the standard deduction for married filing joint (24,000) and two IRA accounts (12,000) I can get your AGI down to 124000 pretty easily. (80K+ 80K = 160K - 6,000 - 6,000 - 24,000 = 124K). If the game is to get under 100K you can probably find a way to do it. You can use the money in the IRA to buy more real estate as long as you are not actively managing it. Do you have a business like and LLC for your REI? If so you can probably open up a Solo IRA where the limits are much higher than 6K and you can invest in RE through it. There are other strategies as well that can keep your bucks in your pocket rather than giving them to Uncle Sam.

Congrats on the marriage! Way to be proactive in your planning. Very few do this and it fantastic that you are thinking about this. 

Best, Andrew