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The affect of unemployment affecting rental losses

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Level 1

I have a client who has some current rental losses. He also received some unemployment benefit.

The  rental losses are being reduced by the unemployment benefit from each rental property and as to the total loss. So, it looks like the unemployment has a double affect on the rental losses.

 

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Level 11
Level 11

What is your clients AGI

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Level 15

And... what's the filing status?

Plus, have you looked at F 8582 to follow the numbers?

Former Chump... umm.... AllStar.
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Level 15

And, I miss our Grammar policeman... 

Former Chump... umm.... AllStar.
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Level 11

Unemployment raises AGI, and so does wages, interest, dividends, capital gains, alimony received, taxable SSI, business income. Which then could limit allowable rental losses.

It's not just unemployment.

** I'm still a champion... of the world! Even without The Lounge.
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Level 15

@sengchang wrote:

The  rental losses are being reduced by the unemployment benefit from each rental property and as to the total loss. So, it looks like the unemployment has a double affect on the rental losses.


What is the double effect you are referring to?  There is none.  When PAL is limited and there are multiple properties, that limitation will be allocated among those properties.  That's one and the same.

Also, unemployment compensation is taxable for federal tax purposes.  Since it's not among the type of income that is to be disregarded for purposes of §469(i) as defined under subparagraph (3)(E), the unemployment compensation will be part of the MAGI that could limit your client's PAL.

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Still an AllStar