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OK. Looks like you get what I'm talking about.
I'm not a real estate professional, my AGI is below 100,000, and i did "actively participate" and i didn't live in the rental house at all during the year.
And again, I did live apart from my spouse for the entire year, and i'm filing a separate tax return.
So everything applies. I should be able to claim up to $12,500 in losses, right?
I can't seem to make it happen on Taxact. I've checked the box for filing separately, and I've checked the box for "lived apart the entire year".
What do i have to do?
If your modified adjusted gross income is more than $100,000 ($50,000 if married filing separately) but less than $150,000 ($75,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your modified adjusted gross income.
Generally, if your modified adjusted gross income is $150,000 or more ($75,000 or more if married filing separately), there is no special allowance."
There does not seem to have been any problem with the software for 2011, but changing from filing single and getting the special allowance when your income was less than 150K in 2010 changed to not getting any special allowance when your income was more than 75K in 2011 due to the lower limit for married filing separately.
Sorry to say that there is no special allowance when modified adjusted gross income is more than $75,000 if married filing separately.
Of course, those losses not allowed are carried forward until they can be allowed or when the activity is fully disposed in a taxable transaction so all the loss will count, eventually.
Please ask if you need clarification or more information.
Just to follow up, if my income is never below 75k, then I'll never be able to deduct the loss, so carrying the loss forward will be meaningless, right?
Please continue to ask if you need more information.