Amazing! As many have already mentioned, you've successfully simplified a complex topic. I really appreciate your visual PowerPoint presentation; it greatly helps in understanding the two distinctions.
What is the benefit, if any, of checking the active box when your income is too high to be able to write off the passive losses against your active income? Thank you!
Can you use the R/E Pro status route if you're currently a high wage medical earner but was once a real estate agent who did meet the hour requirements?
Hi Navi, I am realtor. We bought a house last year as a rental property. My spouse earns more than 150k. When filling tax return turbo Tax staff told him he can not deduct the losses ( expenses and depreciation) snice his income is above 150k. But he did not mentioned that I am realtor. I also manage the rental property. Can we still fill those losses and deprecation this year? or do we have to carry them to next year tax filling? Thanks.
In this case your spouse is the W2 “active” income. You would be the real estate “investor”. In Turbo tax when you got to the rentals portion (schedule E) it asked you who owned the rental. It gave you 3 choices. You. Spouse. Or both. Select you. Another question was do you actively participate in managing the property select yes if you self manage, do a repair etc…. Then, and only then, you can use passive losses to offset active income (w2)
Sounds like if you’re a w2 employee that’s getting married and renting your spouse’s old house instead of selling it.. it’s a dumb idea. The best I can hope for is someone is paying down my mortgage.. or am I missing something?
Hi, thank you, very informative video. For people with MAGI > $150K, can their accumulated passive losses offset against capital gains from stocks, RE or other assets?
Navi, As a passive investor (active), if we dispose of our interest in a real estate property or an interest in a syndicated property is disposed-of, can the freed up passive losses (equal to the capital gain) then be applied against ordinary income (e.g. IRA-Roth Conversion, ordinary income, etc.) rather than any passive capital gain, to reduce the overall tax rate, and then pay the capital gain tax rate on the capital gain.
Can you qualify as a RE professional if you have a w2 but get your real estate license solely for the purpose of offsetting w2 income while having passive losses via rentals?
Hi, as a U.S. citizen, if I bought a new construction condo in 2019 in Ukraine, and builder/project went BK, and recently, the city of Kyiv repossesed the land they were building on, claiming it was gotten fraudently in 2006 involving a bribe. Dead project Not sure how to write off this loss. Can't find any info. Do you know, or if not, where I can find such info? Thanks
If I have a paper loss due to passive real estate investments, say $40,000, and I don’t use them to offset gains, can I choose to take a $40,000 tax refund? Keeping in mind I’m a purely passive investor in this case and not a real estate professional
If I have 10 rental properties and 1 is showing a loss and my income exceeds 200K W2, how do I roll up all properties together so the loss on the one property can write down the profit on another property?
I need you in my life. Can you be my CPA? How can we connect? I need to learn more about your services and fees. I live in Texas and I am a Realtor. I watched so many of your videos and learned a lot but need further guidance.
I am a widow my husband and I own a property well to start this property is paid for I git the tittle of it my husband died and I'm not in the tittle now I'm in need to sale it in California a home in same block sold for 4 times higher then what I paid for my property I need advice
hello, I have 20k in losses from renting a property. This means that if the next year I get income for 12k I can deduct this amount due to carrying the losses to the next year? or they only can be accrued if I sell the property
Yess I have an S-Corp Marketing Agency … Last year was my 1st year Leasing out some of my office spaces I had a loss Should I be using this form??? I don’t own the building HELP!
For Active Investor Status, does it work in reverse? Can you use your Schedule C carryforward losses with your Schedule E to offset the profit from your rental property? Thanks! Love this video!
Wonderful video. I am a new short term vacation Real Estate investor. I have a passive activity loss from 2022 which produced a K1 loss of $5,000.00. I have no income for 2022. Can I carry this loss forward to 2023 when I will have an income? How do I do that and what forms need to be filed?
You glossed over the 100-150 MAGI category. I have a rental property that is producing a loss. How do I figure out how much I can deduct? At 8:18, you say that it is modified...how?
Thanks - nicely explained - if I am in the magi category of greater than 150 k and sell a property for one million and I have a total of $240k suspended passive losses from that property and another rental property in that year will I deduct the 240k from the net sale price and thus reduce my capital gain tax or am I allowed to deduct the 240k against my magi in that tax year which would be advantageous since I am in the 28 percent earned income bracket and thus using the loss that way would be more advantageous financially vs being able to reduce the amount of capital gains tax which would at 18 percent (capital gain of 15 percent plus NII tax 3.5) thanks
Thank you for the video. I learned that this would fit specifically to my situation where I have a full time job and my wife is the one that takes care of the properties, so She would be the real estate professional here. Thanks again.
Can the passive carryover losses from this year be applied to rental income next year? I have one rental and expect to have a 15k loss this year due to remodeling the home. Next year, I don’t anticipate having enough deductions to offset all the rental income.
I love the way you take time and show the difference between passive and activity losses I would like to enroll in your classes in the near future because this is an area I was struggling with.
This is great content. I was looking to get involved in RE to offset my taxes against my W-2 income.. but from watching this video, it wouldn’t really save me a whole lot. I’m at around $160k(married filling jointly).. I wouldn’t be able to do much with it. Specially now with the homes priced the way they are.
That's right Hernane. RE in your scenario is more of a long-term wealth accumulation strategy while not paying a lot of taxes on the income produced from the rental property.
If you have a W2 job it would be nearly impossible to be classified also as a real estate professional who actively participates in the real estate they own. Now…if your spouse isn’t a W2 employee anywhere there’s your opportunity to have passive losses offset active income.
@@NaviMarajCPA I just subscribed to your channel the other day Navi. Was tempted to purchase your course but too much. How are you with rentals and franchises? We’re opening some coffee shops in Florida.
Thanks for the video on real estate passive activity losses. It is very helpful to clarify the instructions on the tax forms. Three questions: First, if I have passive activity losses from a rental home in a current year, but I have no active income for that current year that I can offset using that passive activity loss as a special allowance, do I still put the passive activity loss as an unallowed loss on my tax return that I can carryover to a future year? Second, do I list that carryover loss for use in a future year by listing it on form 8582 on line 1d and 16 as total losses allowed (it's a bit confusing that i list it as an unallowed loss to carryover to next year, but then list it as allowed loss)? Third, can I use the carryover passive activity loss to offset next year's passive income?
I have the same question. I have a passive activity loss from 2022 which produced a K1 loss of $5000.00. I have no income for 2022. Can I carry this loss forward to 2023 where I will have an income? How do I do that and what forms need to be filed?
Thank you for simplifying this , i have one question though: if you have passive losses ( because you end up spending on fixing up the property) on a rental property in 2022 and you end up selling the property in the same calendar year can you use the passive losses and reduce your capital gains on the property?
What a fantastic video. Very well-made. My income is too high to write off my passive income against my active income but I do have several real estate crowdfunding deals through crowd Street. Those distributions are classified as return on capital and I get a K-1 for those. Could I write off my passive losses against those distributions?
Income from passive K-1 syndicated real estate deals can be offset by your own passive real estate losses. But when the distributions are coded as return of capital, that's not taxable since it's return of your capital rather than profit. In later years if there is profit that is reported as profit, that's when you'll have taxable income that your real estate passive losses can be used to offset.
Thanks for the great video. I would like to get clarification on one scenario. I am single and have owned one rental property for over 15 years. I have accumulated carry forward passive losses of 126k. I was not able to claim any of our passive losses due to income exceeding $150K annually when I was working. I have recently retired and now my income can be less than 100k. My question is: Can I now deduct up to 25k each year from both current and past carry forward passive losses as long as my income is below $100K annually?
No, unfortunately once the losses are suspended they can't be unlocked if your future income is lower. You'll have the suspended passive losses until you either sell the property, or if you have future taxable passive or rental income.
@@tax-modern Hello are you sure of this? So if I am understanding you correctly the suspended past passive losses do get unlocked against future taxable passive losses. However they cannot be unlocked for the provision in the law that allows for passive losses to be written off against regular income if less than $100K?
Amazing! As many have already mentioned, you've successfully simplified a complex topic. I really appreciate your visual PowerPoint presentation; it greatly helps in understanding the two distinctions.
Very educational video..... I learned the fundamentals of Passive Income, Passive Losses, Qualified Business Income deductions, etc......Thanks
Thank you for this video. It's very helpful!
What is the benefit, if any, of checking the active box when your income is too high to be able to write off the passive losses against your active income? Thank you!
Very informative. Thank you
Yes, good info, thank you and God bless.
Great content. Very useful.
Can you use the R/E Pro status route if you're currently a high wage medical earner but was once a real estate agent who did meet the hour requirements?
Are you able to take that loss and use it for a subsequent year? Or can you only use the loss when you sell the property?
You can use it in a subsequent year provided that your rental property produces a gain instead of a loss in future years.
Does this still apply if your have a non taxable income?
Thank you, you really have a talent to teach a complicated subject in a simply way 🙏
Thanks @Jul He....I've been getting this feedback a lot lately. A hidden talent I never knew I had. Thanks again for the feedback!
Solid video. Have 3 small rentals in Delray Beach, passive losses are accumulating. Where in FL are you located.
can you do my taxes?
Maybe....you can shoot me an email to learn more about how I help my clients.
Hi Navi,
I am realtor. We bought a house last year as a rental property. My spouse earns more than 150k. When filling tax return turbo Tax staff told him he can not deduct the losses ( expenses and depreciation) snice his income is above 150k. But he did not mentioned that I am realtor. I also manage the rental property. Can we still fill those losses and deprecation this year? or do we have to carry them to next year tax filling? Thanks.
Did you get a response or figure out how you were able to e-file in this situation?
In this case your spouse is the W2 “active” income.
You would be the real estate “investor”.
In Turbo tax when you got to the rentals portion (schedule E) it asked you who owned the rental. It gave you 3 choices. You. Spouse. Or both. Select you.
Another question was do you actively participate in managing the property select yes if you self manage, do a repair etc….
Then, and only then, you can use passive losses to offset active income (w2)
Sounds like if you’re a w2 employee that’s getting married and renting your spouse’s old house instead of selling it.. it’s a dumb idea. The best I can hope for is someone is paying down my mortgage.. or am I missing something?
Hi, thank you, very informative video. For people with MAGI > $150K, can their accumulated passive losses offset against capital gains from stocks, RE or other assets?
Navi, As a passive investor (active), if we dispose of our interest in a real estate property or an interest in a syndicated property is disposed-of, can the freed up passive losses (equal to the capital gain) then be applied against ordinary income (e.g. IRA-Roth Conversion, ordinary income, etc.) rather than any passive capital gain, to reduce the overall tax rate, and then pay the capital gain tax rate on the capital gain.
Can you qualify as a RE professional if you have a w2 but get your real estate license solely for the purpose of offsetting w2 income while having passive losses via rentals?
Hi, as a U.S. citizen, if I bought a new construction condo in 2019 in Ukraine, and builder/project went BK, and recently, the city of Kyiv repossesed the land they were building on, claiming it was gotten fraudently in 2006 involving a bribe. Dead project
Not sure how to write off this loss. Can't find any info. Do you know, or if not, where I can find such info? Thanks
If I have a paper loss due to passive real estate investments, say $40,000, and I don’t use them to offset gains, can I choose to take a $40,000 tax refund? Keeping in mind I’m a purely passive investor in this case and not a real estate professional
If I have 10 rental properties and 1 is showing a loss and my income exceeds 200K W2, how do I roll up all properties together so the loss on the one property can write down the profit on another property?
If you are an active investor, wouldn't you need to pay S/E tax. If so would it be the 15.3 or the 7 percent
I need you in my life. Can you be my CPA? How can we connect? I need to learn more about your services and fees. I live in Texas and I am a Realtor. I watched so many of your videos and learned a lot but need further guidance.
I am a widow my husband and I own a property well to start this property is paid for I git the tittle of it my husband died and I'm not in the tittle now I'm in need to sale it in California a home in same block sold for 4 times higher then what I paid for my property I need advice
This is good info, I'm a real estate agent and this info helps!
Thanks Dana - glad you found it helpful!
hello, I have 20k in losses from renting a property. This means that if the next year I get income for 12k I can deduct this amount due to carrying the losses to the next year? or they only can be accrued if I sell the property
Yess I have an S-Corp Marketing Agency … Last year was my 1st year Leasing out some of my office spaces I had a loss Should I be using this form??? I don’t own the building HELP!
For Active Investor Status, does it work in reverse? Can you use your Schedule C carryforward losses with your Schedule E to offset the profit from your rental property? Thanks! Love this video!
In general, no, it doesn’t work in reverse. It is possible if you have a short term rental, that it can. Thanks for the comment!
Wonderful video. I am a new short term vacation Real Estate investor. I have a passive activity loss from 2022 which produced a K1 loss of $5,000.00. I have no income for 2022. Can I carry this loss forward to 2023 when I will have an income? How do I do that and what forms need to be filed?
You glossed over the 100-150 MAGI category. I have a rental property that is producing a loss. How do I figure out how much I can deduct? At 8:18, you say that it is modified...how?
I bought a condo in 2022, can I deduct it in 2023?
Can I use the tax and other expenses for 2023? Because I rented on 2023
Can you still take bonus depreciation (80%) or cost seg the property in the first year and carry the excess of $25,000 into future years?
Thanks - nicely explained - if I am in the magi category of greater than 150 k and sell a property for one million and I have a total of $240k suspended passive losses from that property and another rental property in that year will I deduct the 240k from the net sale price and thus reduce my capital gain tax or am I allowed to deduct the 240k against my magi in that tax year which would be advantageous since I am in the 28 percent earned income bracket and thus using the loss that way would be more advantageous financially vs being able to reduce the amount of capital gains tax which would at 18 percent (capital gain of 15 percent plus NII tax 3.5) thanks
Thank you for the video. I learned that this would fit specifically to my situation where I have a full time job and my wife is the one that takes care of the properties, so She would be the real estate professional here. Thanks again.
Can the passive carryover losses from this year be applied to rental income next year? I have one rental and expect to have a 15k loss this year due to remodeling the home. Next year, I don’t anticipate having enough deductions to offset all the rental income.
When selling a rental what about paying the depreciation recapture 😬 Is one obligated to depreciate a rental? Thanks
How to carry forward the rental loss? Any specific tax forms to fill out when filing the tax 1040 and schedule E?
I love the way you take time and show the difference between passive and activity losses I would like to enroll in your classes in the near future because this is an area I was struggling with.
Can the spouse be a real estate investor but the investment be on my name to take advantageof the RE Professional? We are joint filers
Fantastic explanation very well illustrated and great accompanying explanation
Can I deduct the passive loss from rental against other passive income such as interest/dividend income?
What's your source for when you sell a rental and can take all your unused passive losses.
This is great content. I was looking to get involved in RE to offset my taxes against my W-2 income.. but from watching this video, it wouldn’t really save me a whole lot. I’m at around $160k(married filling jointly).. I wouldn’t be able to do much with it. Specially now with the homes priced the way they are.
That's right Hernane. RE in your scenario is more of a long-term wealth accumulation strategy while not paying a lot of taxes on the income produced from the rental property.
If you have a W2 job it would be nearly impossible to be classified also as a real estate professional who actively participates in the real estate they own.
Now…if your spouse isn’t a W2 employee anywhere there’s your opportunity to have passive losses offset active income.
Hi Navi, do you help prepare taxes...
Can you prepare mine?
Can rental losses offset 401k distributions
thank you so much im 17 trying to learn as much as I can about real estate and its loopholes, I appreciate it!
Thank you, very much
You’re welcome!
Good info, thanks for this
You're welcome!
What state are you located in
The Sunshine State....Florida. :-) That said, I help clients throughout the US.
@@NaviMarajCPA I just subscribed to your channel the other day Navi. Was tempted to purchase your course but too much. How are you with rentals and franchises? We’re opening some coffee shops in Florida.
Thanks for the video on real estate passive activity losses. It is very helpful to clarify the instructions on the tax forms. Three questions: First, if I have passive activity losses from a rental home in a current year, but I have no active income for that current year that I can offset using that passive activity loss as a special allowance, do I still put the passive activity loss as an unallowed loss on my tax return that I can carryover to a future year? Second, do I list that carryover loss for use in a future year by listing it on form 8582 on line 1d and 16 as total losses allowed (it's a bit confusing that i list it as an unallowed loss to carryover to next year, but then list it as allowed loss)? Third, can I use the carryover passive activity loss to offset next year's passive income?
I have the same question. I have a passive activity loss from 2022 which produced a K1 loss of $5000.00. I have no income for 2022. Can I carry this loss forward to 2023 where I will have an income? How do I do that and what forms need to be filed?
Thank you for simplifying this , i have one question though: if you have passive losses ( because you end up spending on fixing up the property) on a rental property in 2022 and you end up selling the property in the same calendar year can you use the passive losses and reduce your capital gains on the property?
I am not the video maker, but from everything I have read and learned, yes.
What a fantastic video. Very well-made. My income is too high to write off my passive income against my active income but I do have several real estate crowdfunding deals through crowd Street. Those distributions are classified as return on capital and I get a K-1 for those. Could I write off my passive losses against those distributions?
Income from passive K-1 syndicated real estate deals can be offset by your own passive real estate losses. But when the distributions are coded as return of capital, that's not taxable since it's return of your capital rather than profit. In later years if there is profit that is reported as profit, that's when you'll have taxable income that your real estate passive losses can be used to offset.
Thank you!
You're welcome!
great no BS vid! thank you!!!
Thanks!
Thanks for the great video. I would like to get clarification on one scenario. I am single and have owned one rental property for over 15 years. I have accumulated carry forward passive losses of 126k. I was not able to claim any of our passive losses due to income exceeding $150K annually when I was working. I have recently retired and now my income can be less than 100k. My question is: Can I now deduct up to 25k each year from both current and past carry forward passive losses as long as my income is below $100K annually?
No, unfortunately once the losses are suspended they can't be unlocked if your future income is lower. You'll have the suspended passive losses until you either sell the property, or if you have future taxable passive or rental income.
@@tax-modern Hello are you sure of this? So if I am understanding you correctly the suspended past passive losses do get unlocked against future taxable passive losses. However they cannot be unlocked for the provision in the law that allows for passive losses to be written off against regular income if less than $100K?
@@JohnDoe-pe6iu Yes. I think you meant to say "future taxable passive income". But yes.