Dwight owns an apartment complex that has a $30,000 loss. His adjusted gross income is $85,000 before the loss. Since he qualifies as an active participant he may deduct $25,000.

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Dwight can deduct up to $25,000 of his rental real estate loss if he actively participates in the rental activity and his adjusted gross income (before the passive activity losses) is $100,000 or less, with the deduction phasing out between $100,000 and $150,000 of AGI.

Dwight Owns an Apartment Complex That Has a $30,000 Loss