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Alexa’s AGI from all sources other than the rental property is $200,000. What effect does the rental activity have on her AGI for the year?

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Answer:

The first part of the question is missing, but we do not really need to know how much passive loss Alexa suffered from rental activities to determine that she will not be able to deduct any passive losses form her AGI.

Since Alexa's AGI is more than $150,000, she cannot deduct any passive losses from it. If a person's AGI is $100,000 or less, they can deduct up to $25,000 of passive losses. That deduction starts to phase out for income levels above $100,000 and it completely phases out when the AGI reaches $150,000.

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