Rental Passive Loss Carryforward 2027 Calculator
Calculate rental passive loss carryforward 2027 — losses limited by passive income rules unless real estate professional. $25k allowance phase-out at $150k AGI.
Passive Loss Rules
Section 469: Rental real estate = always passive. Losses can only offset passive income. Excess carries forward indefinitely. Released at sale of property.
$25k Allowance
Active participation in rental (you make decisions) allows up to $25k loss against ordinary income. Phases out $1 for every $2 over $100k AGI. Zero at $150k AGI.
Real Estate Professional Exception
750+ hours/year in real estate + more time in real estate than any other business. Then rental treated as active — losses fully deductible against ordinary income.
Trapped Losses
Carryforwards trapped until: 1) Future passive income offsets, 2) Property sold (released against gain), 3) You become real estate pro. Plan for trapped losses.
Source: irs.gov Section 469 Passive Activity Rules, Form 8582. Last updated: May 2026.
Frequently Asked Questions
Can I become real estate pro mid-year?
Yes but must satisfy 750+ hours rule for FULL year. Quarterly tracking critical. Spouses must each qualify independently (or one with 750+).
Short-term rental loophole?
Avg guest stay < 7 days = NOT passive (treated as active business). Loss deductible if materially participate (100+ hrs).
Sale releases all losses?
Yes if complete disposition to unrelated party. Partial sale = pro-rata release.