"finniganps" <finniganps[at]gmail.com> wrote:

- quote -

the test is not whether or not you have a RE license, it is
what you DO. You don't need a real estate license to manage
your own properties.

my question is this: is some of the income from the S corp
potentially "passive"? If so, it can be offset.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Couldn't he or his spouse "get around" it by getting a real
estate license and becoming a realtor? I thought RE
professionals aren't subject to the income limitations.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"John Gulbrandsen" <no[at]spam.com> wrote:

- quote -

The whole point of the limitation was to keep people with
positive cashflows, a/k/a those making money, from showing
paper losses which increased their profits through lower
taxes. Sorry, no way around it.

You could improve your cash flow by investing more cash so
your mortgage payments are less and still come out the same
on taxable income.

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

From what I've learned passive losses from real-estate
rentals can only be offset against other passive income
(i.e. income from other rental properties). One exception to
this rule is that the IRS allows up to $25K of passive
losses to be offset against earned income if the earned
income is less than $100K. Over $100K the deduction is
phased out and if the earned income is $150K the deduction
is no longer allowed.

Is there a loop hole that can be used to get around this
limitation? Without the depreciation it will be very hard to
find positive cashflow properties where I live (southern
California). I have income from an S corp well over the
$150K cutoff limit.

Thanks,
/John.

---------------------- John Gulbrandsen a_t hotmail d_o_t com
Operates in the S and I Quadrants
----------------------
<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >