Frequently, when renting real estate, the result is a net loss. But can you use this loss to offset other income? This tells you the circumstances where you can and when you can't. Besides providing a basic overview of passive activity loss limitation, this video describes the $25,000 "special allowance" for rental losses, and defines what a "real estate professional" is with regard to renting properties.

Additional Information and Resources:

IRS Publication 925: "Passive Activity and At Risk Rules:" https://www.irs.gov/pub/irs-pdf/p925.pdf

IRS Publication 527: "Residential Rental Property": https://www.irs.gov/pub/irs-pdf/p527.pdf

IRS Schedule E: "Supplemental Income and Loss": https://www.irs.gov/pub/irs.pdf/f1040...

IRS Form 8582: "Passive Activity Loss Limitations": https://www.irs.gov/pub/irs.pdf/f8582...

IRS From 8995: "Qualified Business Income Deduction (Simplified)": https://www.irs.gov/pub/irs.pdf/f8995...

nolo.com: "Can You Deduct Your Rental Losses?": https://www.nolo.com/legal-encycloped...

The Tax Geek on Twitter: @taxgeekusa

The Tax Geek on Reddit: www.reddit.com/r/askataxgeek

Image Credits:

Wikimedia Commons. (CC-SA 4.0)
NatGeoLover
Rossograph
Stilfehler
Pexels.com

The images of "Alice and "Darryl" were generated by thispersondoesnotexist.com and any resemblance between their likenesses and any person, living or dead, is incidental and not intended.

Intro Music: "Bluesy Vibes" - Doug Maxwell - YouTube Audio Library

Outro Music: "Modern Attempt" - Track Tribe via YouTube Audio Library

DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or investment advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or investment professional.

The information in this video is current as of date of publication, and is subject to changes.