itonewbie
Level 15

Could you clarify what you meant?  How is investment interest offsetting rental real estate income?  And how would you like it to offset capital gains?

If you're referring to F.4952, rental income subject to PAL is generally not considered net investment income.  Capital gains are not either because you can't use an income that's taxed at a lower rate to allow an expense that would reduce an income at marginal rate, unless an election is made to forego the preferential treatment.  In fact, PTO would optimize that for you and even give you a suggestive diagnostic.

All of these happen on F.4952 and Sch A, so there is no offset against the rental real estate income or capital gains per se.

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