Tax law does not trust your rental property tax deductions.
The law assumes you have the power to make your rental properties throw off paper losses—and that you can do this without suffering any real economic loss.
To stop you from deducting a loss you never truly felt, the government built a “passive loss” test. When you fail this test, your rental property losses get tossed into the suspended-loss tar pit.
Then, in every later year that you again fail the passive-loss test and again have rental losses, the IRS tosses those losses into the tar pit to join the others.
The bad news. You could be sitting on suspended passive losses you have been unable to deduct for years. The good news: The losses are merely suspended, not destroyed. They sit in the pit until you free them.
This article shows you how to unlock suspended losses ... Log in to view full article.
