Hi,
I asked Galaxie this question on her blog and then it occurred to me that maybe this is a question for a more general mustachian audience: what is the maximum amount you can make to deduct rental expenses?
Our taxable wage income is around 187,000 or so (varies depending on bonuses). Gross it is probably over 250,000 as we max out our 401ks and our FSA and our rental unit (which is below our house) brings in around 24,000. Our accountant has told us a number of times that we cannot deduct our rental expenses right now because our income is too high, but that when our income drops (probably when we retire, which is admittedly a while from now) we'll be able to take the deductions retroactively. (She files the amount of rental expenses each year with the IRS). I was discussing this with my dad, who said this sounds strange to him as does the income limit, but he also admits that our income is higher than what he made, so he is unsure. Do any of you know for sure? Also, if it makes a difference, we're in California. Thank you in advance!