US Passive Income Tax Strategy Insights
Enter Your Passive Income & Loss Information
Enter your total income and losses from all passive activities. Passive activities generally include rental activities and businesses where you do not materially participate.
Used for context in the analysis.
Relevant for the rental real estate $25k exception. This tool does NOT calculate MAGI.
Enter as a positive number. Include losses from both rental real estate and other passive activities.
Rental Real Estate Specifics (Optional)
Provide details here if you have rental real estate activities, to illustrate potential exceptions. Ensure these amounts are *also* included in the 'Total Passive Income/Losses' above if they are indeed passive.
Enter as a positive number.
Requires meeting specific tests (e.g., > 750 hours in real property trades/businesses, more than half of all service hours). If yes and you materially participate, your rental activities may not be passive.
Less stringent than material participation. Requires owning at least 10% of the activity and making management decisions. Relevant for the $25k loss exception if not a Real Estate Professional.
Insights & PAL Analysis
Enter details in the "Enter Passive Income/Loss" tab and click "Analyze Passive Income/Loss".
- Losses from passive activities can generally only offset passive income.
- Passive losses cannot offset non-passive income (like wages, active business income) unless an exception applies.
- Unused passive losses are suspended and carried forward indefinitely until you have passive income or dispose of the entire activity.
- **Material Participation:** Meeting certain tests allows a business activity to be non-passive.
- **Real Estate Professional Exception:** If you qualify and materially participate in rental activities, they are generally not passive.
- **Rental Real Estate Active Participation Exception:** Allows deducting up to $25,000 of rental losses against non-passive income, subject to MAGI phase-out.