![]() If these passive losses exceed your passive income, they are suspended and carried forward indefinitely until future years, when you either have passive income or sell a property at a gain. Losses from rental property are considered passive losses and can generally offset passive income only (that is, income from other rental properties or another small business in which you do not materially participate, not including investments). For additional information on reducing your tax bill as a larger-scale investor, check this out. ![]() The treatment of these losses is often misunderstood by investors for various reasons, so we’ll use this article to clear up common misconceptions of these IRS standards. Simplify your rental property reporting Learn MoreĪs a rental property owner, it’s not uncommon for your properties to produce a net loss for tax purposes thanks to depreciation and other operating expenses.
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