If you or your spouse qualifies as a real estate professional,
the so-called passive loss rules don’t apply. Then you can
currently deduct any and all losses from your rental property,
against your other income. In order to qualify as a real
estate professional, two hurdles must be cleared:
during the year must be in real estate-related activities
such as construction, rental property management, or real
estate brokerage.
year in your real estate activities.
A retiree, for example, might put in 15 hours a week (780
hours a year) on these real estate activities while not
holding down a full-time job. If you meet both tests and
thus qualify as a real estate professional, you can
currently deduct any losses from rental property against
other taxable income.