The $25,000 allowance phases out completely at $150,000 AGI, leaving the loss suspended.
Real Estate Accounting
Real estate passive loss tracker that shows what is deductible now vs. suspended.
Enter rental losses, passive income, AGI, and participation status to calculate how much of the current-year rental loss is deductible and how much suspends under passive activity rules.
Direct answerThe IRS passive loss rules limit rental loss deductions based on AGI, participation level, and passive income - this tool shows exactly how much of each year's loss is deductible versus carried forward.
$25,000 allowance calculationAGI phase-outSuspended loss carryforward
1. Enter loss details and taxpayer status
CalculatorEnter current-year rental loss, passive income, prior suspended losses, and AGI to calculate deductible and suspended amounts.
Enter loss details or load a sample to calculate the passive loss position.
Live Tool
Real Estate Passive Loss Tracker in the browser
Enter the loss details and participation status to calculate deductible vs. suspended amounts.
Privacy-first workflow
This page runs in the browser and does not upload any data.
What this tool is built to solve
The IRS passive loss rules limit rental loss deductions based on AGI, participation level, and passive income. This tool shows exactly how much of each year's loss is deductible versus carried forward as a suspended loss.
Taxpayers qualifying as real estate professionals are not subject to the passive loss limitation.
Passive income from other investments can absorb passive rental losses regardless of AGI.
Key signals
Use these signals to plan the tax position and manage suspended loss carryforwards.
Decision support
Planning context for managing the passive loss position across years.
Passive loss summary
Deductible and suspended amounts ready for Schedule E workpaper or tax return review.
The real estate allowance is calculated with the AGI phase-out applied, showing the exact allowable deduction for active participants.
The allowance phases out from $100,000 to $150,000 AGI (single or MFJ). The phase-out is applied automatically.
Real estate professionals qualifying under IRC 469(c)(7) bypass the passive loss limitation entirely.
Track cumulative suspended losses year over year - released at property sale or when passive income exceeds losses.
Guide Below The Tool
How to use the real estate passive loss tracker well
A real estate passive loss tracker calculates how much of the current-year rental loss is deductible now and how much suspends as a carryforward under IRS passive activity rules.
Rental property owners, real estate investors, CPAs, and tax preparers navigating IRC Section 469 passive activity rules on Schedule E returns.
AGI relative to the $100,000-$150,000 phase-out range and participation level (active, passive, or real estate professional) determine most of the answer.
Workflow
Four practical steps
1
Determine participation level before calculating the loss limit.Active participation, real estate professional status, and pure passive investor status produce completely different deductibility outcomes.
2
Enter the current-year loss and prior suspended loss carryforward.Both current-year losses and carryforward losses are used against passive income and the allowance.
3
Review deductible amount and new suspended balance.The deductible amount reduces ordinary income on the current return. The suspended amount carries forward and will show up on Form 8582.
4
Plan around the suspended loss balance for disposition decisions.At sale, all suspended passive losses are released and can offset the recognized gain. This affects the net tax cost of selling vs. holding.
Active participation requires meaningful participation in management decisions - setting rents, approving repairs, screening tenants. A nominal role doesn't qualify.
More than 750 hours per year and more than 50% of working time in real property trades or businesses. Must be documented with time logs.
For passive loss purposes, AGI is modified (MAGI). Some above-the-line deductions are added back. Verify with the actual Form 8582 instructions.
Passive losses first offset passive income from all sources before any remaining loss goes through the $25,000 allowance test.
Married filing separately taxpayers have a $0 allowance (not $12,500) for real estate losses. This is a common error on joint vs. separate return planning.
At a fully taxable sale of a passive activity, all suspended losses are deductible in the year of sale regardless of current passive income or AGI.
The functional tool stays on top so users can solve the immediate deductibility question before reading a guide.
Switch between active, RE professional, and passive investor status to see the deductibility outcome under each scenario.
Ledger Summit can build a multi-year passive loss tracking model or tax planning integration later, but this page delivers value now.
FAQ
Real Estate Passive Loss Tracker questions, answered directly
Active participants in rental real estate may deduct up to $25,000 of rental losses against ordinary income. This allowance phases out between $100,000 and $150,000 of AGI and is fully eliminated at $150,000 AGI.
Under IRC Section 469, rental activities are generally passive. Losses from passive activities can only offset passive income unless an exception applies, such as the $25,000 real estate allowance or real estate professional status.
Suspended passive losses carry forward indefinitely and can be deducted when the property generates passive income or is disposed of in a fully taxable transaction.
No. The calculator runs entirely in your browser and does not send any data to a server.
Next Step
Need this connected to a broader workflow?
Use the free browser tool first. If you need multi-year passive loss tracking, integrated Schedule E preparation, or disposition tax planning, Ledger Summit can build the next layer.
Book a free call