RE: Income reduction from rental property

From: Mike Broadhurst <specpub@annex.com>
Subject: RE: Income reduction from rental property
Date: Tue, 04 Aug 1998 09:04:22 -0700

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on Mon, 3 Aug 1998 13:09:37 -0400 Rick.Schafer@bdk.com wrote:

>>Unfortunately, you cannot charge your rental income loss
against non-rental income.  This I understand was taken away in the Reagan
years.  If you own and rent out 1 property, and take your expenses (including
insurance, depreciation, repairs, advertising, mileage, agency fees, lawn
care,
etc) as deductions, you can only go down to $0 rental income.  Your regular
income (from your job, other investments etc) cannot be reduced by a rental
loss.  If you own more than 1 rental property, you can charge a loss on 1
against a gain on the other.  In other words, you can look at your rentals
as a
pool, and take all your income and all your losses together.  But if you
have a
net loss, you cannot apply that loss to income from a non-rental source.<<

Are you sure about this? I thought the tax law change applied to passive
losses. If you own and rent out one unit, and actively manage it, I believe
you are entitled to apply any rental loss to ordinary income (within
certain limits). 

Can anyone confirm or refute this? If I'm wrong, I hope I don't get audited...

Mike Broadhurst
specpub@annex.com   






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