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MFS Taxpayer not allowed rental loss.

Level 2

In 2018  my client filed HOH and his rental property had a negative net income. His MAGI was below $100K. For 2019 he filed MFS,  his expenses are capped at the amount of rent he received. His 2019 MAGI was $77K.  My client actively and material participates in his rental property management. Researching this, I believe his loss is limited to rental income because the client's MAGI exceeded $50K for MFS.  I tested this conclusion. I reduced the clients MAGI to below $50K. His rental loss was still limited to is rental income.  Why?  Is this a flaw in ProSeries Basic?

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3 Replies 3
Level 15

MFS status disallows the $ 25,000 rental loss.

HOH doesn't.


Former Chump..oops..AllStar...I used to be a people person, then people ruined it

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Level 14

Play with the hypothetical numbers on your own time.  We're busy here, doing tax returns.  

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Level 15

@Busy123 wrote:

In 2018  my client filed HOH

For 2019 he filed MFS,  


It seems like he did NOT live with his spouse at all during the year.  Is that correct?

If so, you need to be sure to check that box on the information sheet.  It is directly below where you check he is filing as Married Filing Separately.