Passive Rental Income or Loss

[rcooley25]

What qualifies as passive Rental Income or Loss?

What are the exceptions to being able to claim a passive rental loss?

Who qualifies as a real estate specialist?

[Terry53029]

Perhaps you should take some CE credits on the subject, and here is a link to pub 925. There is an exception that allows a $25000 loss which is shown in pub 925. Also, in pub 925 you will find the definition of a Real estate Professional.

https://www.irs.gov/publications/p925.

[abctax55]

PIGS/PALS came into being 1986/87 if I remember correctly.

And I remember takes WEEKS of classes to properly address the issues involved.

[TaxGuyBill]

As was mentioned above, there is A LOT involved, so start with Publication 925. After you've read through that a couple of times, feel free to ask us any specific questions that you couldn't figure out in the Publication.

[rcooley25]

Am I right in saying one of the big stumbling blocks are whether or not the owner is an active participant in the operation of the rental property or not?

[sjrcpa]

No. Active participation and AGI under $150,000 can get you the exception that allows up to $25,000 losses to be deducted.

The starting default position is: Rental real estate is a passive activity.

[Accountant-Man]

In 1987 I wrote an 8 hour course for in-house training on the PAL rules. Aggregation, dis-aggregation, YIKES!

THANK GOD! they have been simplified since.

[sjrcpa]

Phase ins, too?

Fun times.

[Accountant-Man]

Some called it phase in, some called it phase outs.