rental losses

[HJSTAXSTOP]

This return is getting stale, gotta deal with it. Losses exceeding 25k, and has the agi negative. Taxpayer has active and material participation. How do I determine the qualified loss and what form do you use to carry the loss forward. thanks, HJ

[Bees Knees]

If AGI is negative, and the taxpayer materially participates, then the full $25,000 rental loss will be allowed. The excess loss is carried over to next year as a passive loss carryforward. Use the worksheets in the instructions for Form 8582 to figure the carryover.

As to the negative AGI, the $25,000 loss allowed will do no good in 2005, since taxable income is already zero. That amount will thus produce a net operating loss.

See TTB, page 7-10 for the special $25,000 allowance for rental real estate.

See TTB, page 8-15 for how to deal with a net operating loss.

[HJSTAXSTOP]

rental losses

Thanks, Bees Knees, I want you for my Buddy this tax season. Thanks again, hj