Passive Activity Loss Limit Calculator
Calculate passive loss limitations and suspended losses.
Basic Passive Loss Limit
Passive Income:$ 50000
Passive Losses:$ 100000
Allowed:$ 50000
Suspended:$ 50000
Prior Suspensions:$ 20000
Passive losses limited to passive income without special status.
Rental Special Allowance ($25K)
AGI:$ 200000
Special Allowance:$ 0
Phase-out: $100K-$150K AGI. Active participation required.
Total Passive Loss Deduction
Deduction Allowed:$ 50000
Suspended Loss:$ 70000
Tax Benefit Lost:$ 16800
$70000 suspended losses carry forward. Consider REPS qualification or activity aggregation.
Activity Classification
Rental: Rental generally passive unless REPS or material participation
Business: Business passive unless material participation (500+ hours)
Investment: Investment activities always passive
Strategies to Release Suspended Losses
- Qualify as Real Estate Professional
- Aggregate rental activities
- Dispose of activity in full transaction
- Generate more passive income
Suspended losses released upon full disposition of activity in taxable transaction.
Passive Activity Key Points
- Passive losses limited to passive income
- Suspended losses carry forward
- Released on full disposition
- REPS breaks passive classification
- Material participation for business
- $25K rental allowance (phase-out)
- Aggregation election for rentals
- Track suspended losses carefully
- Form 8582 for passive activities
- IRS audits passive activity claims