Certain real estate losses are deductible against ordinary taxable income up to a limit of $25,000 when the

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To be eligible for the $25,000 deduction against ordinary taxable income, the taxpayer must have an adjusted gross income of $150,000 or less and must actively participate in the management of the property. This deduction is available for losses incurred in rental real estate activities in which the taxpayer materially participates. Limited partnerships do not necessarily meet the material participation requirement.

Certain Real Estate Losses Are Deductible Against Ordinary Taxable Income