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I have losses from a passive rental real estate activity in which I actively participate. Can I offset the losses against my nonpassive income?

April 26, 2017activity losses offset participate passive Real Estate rental

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I have losses from a passive rental real estate activity in which I actively participate. Can I offset the losses against my nonpassive income?

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A. If your rental of real estate is a passive activity, you may generally offset a loss of up to $25,000 against your nonpassive income if you actively participate in the activity. However, married persons filing separate returns who lived together at any time during the year may not claim this offset. Married persons filing separate returns who lived apart at all times during the year are each allowed a $12,500 maximum offset for passive real estate activities. For additional information on limits on rental losses, refer to Chapter 10 of Publication 17, Your Federal Income Tax, and Tax Topic 425, Passive Activities – Losses and Credits.