For investors, losses on the operation of rental real estate are what type of losses?

Question

Quizplus · Accepted Answer

Losses on rental real estate are considered passive losses for investors, as they are not actively involved in the day-to-day operations of the property. This type of loss can only be deducted from passive income, such as rental income or income from other passive investments. Active losses, on the other hand, are losses incurred from businesses or investments in which the investor actively participates, and can be deducted from active income.

For Investors, Losses on the Operation of Rental Real Estate