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Article Date:
June 2013

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Make Your Rental Property Losses Tax Deductible

Lawmakers do not like your rental property.


The IRS does not like your rental property.


If you want to deduct your rental property losses, you need to run and survive the passive-loss gauntlet.


This article will give you safe passage.


Big Picture


Tax law allows you to qualify to deduct your rental property losses.


One way to qualify (albeit for a limited deduction) is discussed in the article Qualifying for Rental Real Estate’s Tax-Favored $25,000 Allowance.


The second way to qualify is by (1) materially participating as a (2) tax law-defined real estate professional. That’s what this article is about.


Test 1: Real Estate Professional


The test for real estate professional status is an hours-worked test. You pass this test when in real property trades or businesses in which you and/or your spouse materially participate1



you OR your spouse individually work more than 750 hours, and


that more-than-750-hour-work effort by you OR your spouse individually is more than ... Log in to view full article.

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