Question

Ilene rents a property for the entire year. During the year, Ilene reported a net loss of $15,000 from the rental. If Ilene is an active participant in the rental and her AGI is $140,000, how much of the loss can she deduct against ordinary income in the year

Answer 1

The loss can she deduct against ordinary income in the year is $5000.

How to calculate the loss?

AGI = $140000

Less: Allowable limit = $100000

Excess = $40000

50% of excess = $20000

Less: Net loss = $15000

Loss deduction = $5000

Therefore, the loss can she deduct against ordinary income in the year is $5000.

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