Let's say there is a person who had passive losses on rental real estate. According to Form 8582 this person is allowed to deduct all the rental losses because his income is low and the losses are less than $25,000. But let's say this person's income is NOT so low that he has no tax liability. He could benefit by taking SOME of the passive losses, but does not want to take ALL of the passive losses. For example, let's say income is $40,000 and passive losses are the same $20,000. And hypothetically speaking, the person is married with 3 kids. What's the magic number where adjusted income exactly matches zero tax liability? And once that is determined, can the person choose to deduct only some of the passive losses and carry the rest over to a future tax year? How is that reported?
- posted
13 years ago