Ilene rents a property for the entire year. During the year, Ilene reported a net loss of $15,000 from the rental. If Ilene is an active participant in the rental and her AGI is $140,000, how much of the loss can she deduct against ordinary income in the year?

Question

Quizplus · Accepted Answer

If Ilene is an active participant in the rental and her AGI is less than $150,000, she can deduct up to $25,000 of rental losses against her ordinary income. However, this amount is phased out by 50% of the amount by which her AGI exceeds $100,000. In this case, her AGI exceeds $150,000, so she cannot deduct any of the rental losses against her ordinary income. Therefore, the answer is (D) $0.

Ilene Rents a Property for the Entire Year