Real Estate Passive Loss Calculator

Passive losses generally limited to passive income, with $25k active rental participation exception.

Rental loss

AGI

Real estate pro?

Actively participates?

Marginal tax rate %

Deductible loss

$15,000

Suspended loss

$15,000

Current tax savings

$3,600

How the math works

Real estate pro: full deduction. Active + AGI <$100k: up to $25k. AGI $100k–$150k: phaseout. >$150k: suspended.

$30k loss, $120k AGI, active: $25k − ($120k − $100k) × 50% = $15k deductible × 24% = $3,600 savings.

How to Use

Enter rental loss.
Enter agi.
Enter real estate pro?.
Enter actively participates?.
Enter marginal tax rate %.
Read deductible loss.

Frequently Asked Questions

Passive loss limitations?

Default: passive losses (rental real estate) only offset passive income. Suspended losses carry forward. Active participation exception: up to $25k loss against ordinary income for active participants with AGI <$100k (phases out by $150k AGI). Real estate professional status: 750+ hr/yr in real estate trades + >50% of personal services = losses fully deductible against ordinary income. Test: real estate professional spouse can elect aggregation across all rentals.

How is this tax impact computed?

Tax outcomes depend on filing status, income bracket, depreciation schedule, basis adjustments, AMT exposure, and state conformity. Real estate tax planning typically involves cost segregation, 1031 exchanges, opportunity zone, depreciation recapture, passive activity rules, and entity structure (LLC vs partnership vs S-corp). This calculator provides directional analysis — final position requires CPA review.

State conformity?

States vary on conformity to federal tax code: California, NY, MA decouple selectively. Bonus depreciation: most states reduce or eliminate. QBI: most states don't conform. Section 1031: federal-only deferral, some states require state-level recapture. Property tax cap: state-specific (CA Prop 13, MI Headlee, FL SOH). Multi-state property requires apportionment analysis.

When to prioritize this strategy?

Tax strategies have setup cost, complexity, and audit risk. Cost segregation: $5–15k study, materially helps high-basis investors. 1031: 45/180 day deadlines, identification rules, qualified intermediary fees. Opportunity Zone: long hold required. Stack strategies: don't double-count benefits. CPA + tax attorney coordination essential for $1M+ strategies.