Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($15,000) loss; however, Michelle has sufficient tax basis and at-risk amounts to absorb the loss. If Michelle has $115,000 of salary, $10,000 of long-term capital gains, $3,000 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct?

Question

Quizplus · Accepted Answer

$25,000 (exception) − $14,000 (phase-out: ($128,000 − $100,000) × 0.50) = $11,000.

Michelle Is an Active Participant in the Rental Condominium Property