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Tax angles for rental real estate

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. If my AGI for 2014 is $165,000, can I write off losses from an apartment building I own? S.B., Cincinnati

A. Not generally. Under the passive activity loss rules, deductions from passive activities are limited to passive income, but a special rule allows eligible taxpayers to deduct up to $25,000 of losses from rental estate activities.

This special rule phases out for taxpayers with an AGI between $100,000 and $150,000. As things stand now, you won’t qualify for any loss writeoff under the special rule because your AGI is too high.

Tip: If you can manage to lower your AGI for 2014 below $150,000, you will qualify for at least a partial write-off for your real estate losses.

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