Posted on
Author: Scott Zickefoose, CPA
Current economic conditions have forced many rental real estate owners to become accustomed to producing taxable losses. However, current tax laws are prohibiting many from realizing those losses in the current year. Per IRC §469(c)(2), rental real estate income is by default classified as passive income. Passive losses can only be used to offset passive income – not ordinary income or portfolio income. Rental real estate owners often find themselves unable to use the losses derived from their rental activities because they do not have passive income to offset the losses against.
About the Author
Keiter CPAs is a certified public accounting firm serving the audit, tax, accounting and consulting needs of businesses and their owners located in Richmond and across Virginia. We focus on serving emerging growth businesses and companies in the financial services, construction, real estate, manufacturing, retail & distribution industries and nonprofits. We also provide business valuations and forensic accounting services, family office services, and inbound international services.
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.