The ability to deduct your rental property losses against your ordinary income creates a government cash contribution, and that contribution increases your rental property profits.

This boost in profits is what lawmakers had in mind when they enacted the $25,000 active participation rental property loss allowance as a special favor for rental property owners who qualify.

You qualify for the full allowance of up to $25,000 in rental property loss deductions if

you actively participate in the rental, and

your modified adjusted gross income is $100,000 or less.1

The $25,000 tax-favored allowance applies to rental real estate.2 It does not apply to other rentals, such as equipment leases.

This article

contains strategies that help you qualify for and take full advantage of the $25,000 allowance;

shows you strategies that reduce modified ... Log in to view full article.