Rental Carryover Loss

mmeiorsterdo

My AGI this year will be approximately $50K. I have a rental property that I rented for 4 days at about $1200. I spent about 90 days at the property. I materially participate in managing and maintaining the property. I have $30K in carryover losses. Can I offset other income up to $25K this year with those carryover losses?

KristineS

Hi mmeisterdoor,

Thanks for joining our Community.

As each person's tax situation is very different, the facts and circumstances of all information on your tax return matter. We're not able to provide the guidance you need in a public facing forum.

I recommend you take a look at IRS Publication 527, Residential Rental Property. Here is some information regarding your question:

"If you or your spouse actively participated in a passive rental real estate activity, you may be able to deduct up to $25,000 of loss from the activity from your nonpassive income. This special allowance is an exception to the general rule disallowing losses in excess of income from passive activities."

"Deductions or losses from passive activities are limited. You generally can’t offset income, other than passive income, with losses from passive activities. Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. Any excess loss or credit is carried forward to the next tax year."

Also, review Tax Topic 415, Renting residential and vacation property

If you rent a dwelling unit to others that you also use as a residence, limitations may apply to the rental expenses you can deduct. You're considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for a number of days that’s more than the greater of:

1. 14 days, or
2. 10% of the total days you rent it to others at a fair rental price.

My recommendation is to login to your account and get targeted help for your 2025 tax return next year when you'll have total income from all sources, plus other relevant details necessary for tax return preparation.