Justin has AGI of $110,000 before considering his $30,000 loss from rental property,which he actively manages.How much of the rental loss can Justin deduct this year?
A)$10,000
B)$20,000
C)$25,000
D)$30,000

Question

Quizplus · Accepted Answer

Justin can deduct up to $25,000 of rental losses each year if he actively manages the property and his AGI is less than $100,000. However, since Justin's AGI is $110,000, the $30,000 rental loss is reduced by $10,000 ($1 for every $2 over $100,000) and he can deduct $20,000 in rental losses this year. Therefore, the best choice is B.

Justin Has AGI of $110,000 Before Considering His $30,000 Loss