$25,000 Loss Max Taxes
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$25,000 Loss Max Taxes (by MAP [NY]) Jul 21, 2021 10:53 AM
       $25,000 Loss Max Taxes (by Robert J [CA]) Jul 21, 2021 11:09 AM
       $25,000 Loss Max Taxes (by Kim [TX]) Jul 21, 2021 11:36 AM
       $25,000 Loss Max Taxes (by MAP [NY]) Jul 22, 2021 7:53 AM
       $25,000 Loss Max Taxes (by Small potatoes [NY]) Jul 22, 2021 9:37 AM
       $25,000 Loss Max Taxes (by TenantWhisperer [MA]) Jul 22, 2021 5:58 PM
       $25,000 Loss Max Taxes (by MAP [NY]) Jul 23, 2021 6:04 AM

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$25,000 Loss Max Taxes (by MAP [NY]) Posted on: Jul 21, 2021 10:53 AM
Message:

For you accountant types out there, on the federal return, aside from possible depreciation, I see there is a maximum of $25,000 losses on a property for Schedule E. (based on filer's AGI) Note: I have a "regular" full time job where I make less than 100K a year.

Here is the only blurb I could find on the subject:

"Passive loss limitations are based on your adjusted gross income (AGI). If it is less than $100,000, you can claim up to $25,000 of losses reported on line 26 of your Schedule E. If you make between $100,000 and $150,000, the loss amount starts phasing out. If you make over $150,000, the loss on line 26 cannot be claimed.

For those with an AGI over $150,000, not being able to claim your passive loss might sound like heresy. But before you write a letter to Congress in protest, the loss is not actually lost. It is reported on IRS Form 8582 and carried forward.

In summary, Schedule E is for income or losses that are not generated from business operations. Schedule E income is considered passive. The result of Schedule E eventually finds its way to line 17 of your IRS Form 1040. If it isnít there, you may have run into the passive activity loss limit."

-thecollegeinvestor.com

In the case of a gut rehab of let's say a duplex, where no rents are currently coming in, is this for the property as a whole or can it be "per side?" In other words can you do a schedule E for each unit or does it have to be the entire property inclusive?

Apologize in advance for the N00b question. --72.231.xxx.xx




$25,000 Loss Max Taxes (by Robert J [CA]) Posted on: Jul 21, 2021 11:09 AM
Message:

A real estate professional, someone who owns at least 10% in each property and spends between 750 to 1000 hours per year working on their rentals is a profession and they can throw out the $25,000 limitations and write all real estate losses against their other income. Check with your CPA/accountant. --47.155.xx.xxx




$25,000 Loss Max Taxes (by Kim [TX]) Posted on: Jul 21, 2021 11:36 AM
Message:

You will list the units separately on the Schedule E if they are rented separately, but I don't believe you can take your "loss" (actually depreciation) until the unit is ready to rent. If that doesn't happen until 2022, then you will start the depreciation in 2022. Note: I am not a CPA! This is just my understanding, and how I have done my bookkeeping. --23.30.xx.xxx




$25,000 Loss Max Taxes (by MAP [NY]) Posted on: Jul 22, 2021 7:53 AM
Message:

Just to clarify, when I say "loss" this calculates on my tax software when I enter rehab expenses, such as supplies, materials, etc. This usually happens before I rent the units out as I don't like having to rehab whilst the tenants are in place. Not sure if this makes sense. --72.231.xxx.xx




$25,000 Loss Max Taxes (by Small potatoes [NY]) Posted on: Jul 22, 2021 9:37 AM
Message:

If the whole building is empty then it's a capital cost. Can't see that it matters which unit you expense it against. Work on one get it rented and then you can expense all of it in theory(if things are a 'repair'). If you You will begin depreciating the building on your taxes and add each improvement in the year you expense it. For my fire building it took me 2 tax years to do this. --172.58.xx.xxx




$25,000 Loss Max Taxes (by TenantWhisperer [MA]) Posted on: Jul 22, 2021 5:58 PM
Message:

If you incur $30,000 in expenses, you can take $25k this year and the $5k can be applied next year. This is called "loss carried forward".

--73.16.xxx.x




$25,000 Loss Max Taxes (by MAP [NY]) Posted on: Jul 23, 2021 6:04 AM
Message:

Thanks everyone! --72.231.xxx.xx



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