Josie,an unmarried taxpayer,has $155,000 in salary,$10,000 in income from a limited partnership,and a $26,000 passive loss from a real estate rental activity in which she actively participates.If her modified adjusted gross income is $155,000,how much of the $26,000 loss is deductible?

Question

Quizplus · Accepted Answer

A rental loss of $10,000 is deducted against the passive income from the limited partnership interest.None of the remaining $16,000 rental loss is deducted against Josie's salary,even though she actively participates in the activity.The special $25,000 offset for real estate rental activities is reduced to $0 [$25,000 - 50%($155,000 - $100,000)].Therefore,of the remaining $16,000 loss,none can be deducted in the current year.

Josie,an Unmarried Taxpayer,has $155,000 in Salary,$10,000 in Income from a Limited