Question

Carey, a single taxpayer, purchased a rental house, which he actively manages. During the year Carey had a loss of $14,000 from the rental house. If Carey's adjusted gross income is $40,000 before the rental loss, what is the amount of Carey's allowable deduction from form 8582 for the rental activity?

Answer 1

$25,000

Step-by-step explanation:

Under the tax code, an individual may deduct up to $25,000 of real estate loss per year as long as their adjusted gross income is $100,000 or less