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4 Cards in this Set
- Front
- Back
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Gross Income
K. Rental Income (passive activity) - schedule E |
1.General
A passive activity is any activity in which the taxpayer does not materially participate *Gross Rental Income* +Prepaid Rental Income +Rent Cancellation Payment +Improvement In-Lieu-of Rent < Rental Expenses > *Net Rental Income/ Loss* |
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Gross Income
K. Rental Income (passive activity) - schedule E |
2. Rental of Vacation Home
a. Rented Less than 15 Days ---- NON-TAXABLE b. Rented 1 5 or More Days ----- TAXABLE |
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Gross Income
Passive Activity Loss (PAL) |
GR:
(PALs) Passive Activity Losses are NON-DEDUCTIBLE loss unless 2 exceptions : 1- ($25,000 & active) MOM & POP . 2-Real Estate Professional (not passive activity) taxpayer may not use any of the loss attributable to his rental (passive) real estate as an offset against income from (nonpassive) or normal sources (wages , salaries , interest or dividend) in the current year because he does not qualify for the "Mom and Pop" exception. |
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Gross Income
(PAL) exception : Mom and Pop Exception |
up to $25,000 of (passive losses) may be used as an (offset) against income from (nonpassive income). This $25,000 allowance is reduced, but not below zero, by 50% of the amount by which the individual's modified AGI exceeds $100,000. The $25,000 is therefore completely phased out when modified AGI reaches $150,000
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