Active versus passive rental Income?
I am planning to rent my house because I will be moving to a new location for a job. I have already found a tenant through Craigslist, I have prepared a rental agreement myself. I have carried out the credit check and background check myself. There is no property manager involved. I have a handyman type of guy who will attend to any immediate repair issues in my absence. Can I offset the losses on my rental property against the income from my new job? That is, can I act as if the rental income is an active source of income?
Blogs
- Property Investment Club | Home Loan Finder
- ‘House’ season premiere spoiler: Life’s a beach for Huddy! | Ausiello | EW.com
Tagged with: absence • active versus passive income • craigslist • credit check • handyman • http://www.secretaffiliateweapon2-review.com/passive-income/active-versus-passive-rental-income • losses • new job • new location • passive rental agreement • real estate income secrets • rental agreement • rental property
Filed under: Passive Income
Like this post? Subscribe to my RSS feed and get loads more!
richmalika58 (26)
2003 Hosting (1)
austin seo company (1)
Bev@Film New Reviews (1)
Process Equipment (1)
Retirement Income 4U (1)
I assume you are not filing as "married filing separately."
Your rental income is not non-passive income. It is passive income and subject to limitations. If your income from your job is less than $100,000 and you have no other income, you can deduct up to $25,000 of losses against your wages. If your income is more than $150,000, you cannot take a loss until the year you dispose of the property.
Unless you are a real estate professional, real estate rental activity is almost always considered passive. However, if you actively participate in your rental (and the details in your question show you do), you may be able to claim up to $25,000 of loss to offset other income. If you are married filing separately, your loss is limited to $12,500.