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T-14: Billy owns several parcels of rental real estate, and he actively participates in managing the...

T-14: Billy owns several parcels of rental real estate, and he actively participates in managing the properties. His total loss from these activities in 2018 is $30,000 and his AGI for 2018 is $110,000. How much of the disallowed loss from rental real estate activities may be carried over to future years?

a.         0%

b.         10%

c.         50%

d.         100%

Please show your calculations. Thanks.

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Answer #1

Answer :

The correct answer is option (d) 100%. The entire loss from rental real estate property can be carried forward indefinitely to the future until any of the following event occurs in future

  • Rental income accrued in the future against which the loss from rental real estate can be deducted, or
  • The entire interest in the property is disposed by the taxpayer

Thus,100% of the loss from rental real estate property of $30,000 can be carried forward indefinitely to the future until any of the event as mentioned in the above occurs.

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