Passive Activity Loss Calculator
Calculate your rental loss deduction, $25K allowance phase-out, and suspended losses under IRS passive activity rules ? (Form 8582).
Active participation: Most landlords who make management decisions (approving tenants, setting rent, authorizing repairs) qualify. This is a lower bar than "material participation."
Deductible Loss
$15,000
Fully deductible
$25K Allowance ?
$25,000
Suspended Loss
$0
Est. Tax Savings
$3,300
MAGI Phase-Out Range ($100K - $150K)
$0 $100K $150K
Full $25K Phase-out $0
Loss Deduction Breakdown
Modified AGI (MAGI)$85,000
Net Rental Income / Loss-$15,000
Base Allowance$25,000
Phase-Out Reduction-$0
Final Allowance$25,000
Deductible This Year$15,000
Suspended (Carries Forward)$0
Est. Marginal Tax Rate22%
Track your passive losses across all properties and tax years
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Frequently asked questions
What is the $25,000 special allowance for rental losses?
If you actively participate in your rental, you can deduct up to $25,000 of otherwise-passive rental losses against your other (non-passive) income each year — a long-standing statutory figure. Losses you can’t use this year aren’t gone; they carry forward as suspended losses. This tool gives an estimate, not tax advice — confirm with a CPA.
How does the MAGI phase-out reduce my allowance?
The $25,000 allowance phases out as your modified adjusted gross income (MAGI) rises from $100,000 to $150,000 — it drops by $0.50 for every $1 of MAGI over $100,000 and reaches $0 at $150,000. These are long-standing statutory thresholds the calculator uses. Above $150,000 (without Real Estate Professional Status), your current-year passive losses are fully suspended.
What happens to suspended (unused) passive losses?
Suspended passive losses carry forward indefinitely. They free up when you have passive income in a later year, or all at once when you sell the property in a fully taxable disposition. The calculator combines prior-year suspended losses with the current year, mirroring Form 8582.
What counts as active participation?
Active participation is a lower bar than material participation — most landlords who make management decisions like approving tenants, setting rents, or authorizing repairs qualify, and it is what unlocks the $25,000 allowance. Real Estate Professional Status (REPS) is a separate, stricter test that removes the cap entirely. This is an estimate, not tax advice — consult a CPA before filing.