Brandon,a single taxpayer,had a loss of $48,000 from a rental real estate activity in which he actively participated.He also had $27,000 of income from another rental real estate activity in which he actively participated.He acquired both investments in 2013.If Brandon has no other passive income or losses and has adjusted gross income of $84,000 before considering passive activities,how much loss from rental activities can he use to offset his nonpassive income?

Question

Quizplus · Accepted Answer

Brandon can use $25,000 of the loss from the rental real estate activity to offset his nonpassive income. This is because the passive activity loss rules limit the amount of loss that can be used to offset nonpassive income to the amount of passive income from all passive activities. In this case, Brandon has $27,000 of passive income from the other rental real estate activity, so he can use up to $25,000 of the loss from the first activity to offset his nonpassive income.

Brandon,a Single Taxpayer,had a Loss of $48,000 from a Rental