Rental activities and other trade or business activities cannot be aggregated since up to $25,000 of losses from certain rental activities may be deducted annually.

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Rental activities are generally considered passive activities, and losses from these activities can be deducted up to $25,000 annually under certain conditions, but the IRS does allow for the aggregation of all rental real estate activities if the taxpayer qualifies as a real estate professional, making it possible under specific circumstances to treat rental and other trade or business activities in a manner that allows for the combination of income and losses across activities.

Rental Activities and Other Trade or Business Activities Cannot Be