@Carol Yang Hi, Carol, thanks for the information.

Nhia Yang is the owner, of these properties, motivated to sell?

I am Phonchito Yang, 24 years old, a dad and a husband.

You will then have a lot more flexibility in your deductible expenses and can likely get your income below the MAGI threshold.

.* our MAGI exceeds 150k.* We are materially / actively participating in both properties, but we are not RE professionals.The question is - can we offset the 7k of rental income that we currently pay taxes on with the 9k rental loss so that we pay $0income tax between the two properties, and carry forward the 2k (a year) loss until the day we sell vacation rental property?

@Steve Yang It is really hard to answer that.  

@Steve Yang - Where in Chicago?  

@Nhia Yang  I appreciate your question and being at the beckoned call of the tenants and that is not choice I would make either.

Otherwise, your losses are passive and only deductible up to $25,000 against your rentals' income (deduction phases out if your modified adjusted gross income (MAGI) is between $100,000 and $150,000).

For instance: I was listening to the bigger pockets podcast number 13 and leon yang was talking about vegas being a good market, because houses are cheap and they rent out for a good amount.