MAGI is tricky. It tends to "add back" different things for different calculations. Here's a link to the full instructions I posted:
http://www.irs.gov/instructions/i1040se/ch01.html#d0e231And here's another excerpt:
Modified adjusted gross income. This is your adjusted gross income from Form 1040, line 38, or Form 1040NR, line 37, without taking into account:
•Any allowable passive activity loss,
•Rental real estate losses allowed for real estate professionals (see Activities of real estate professionals, earlier),
•Taxable social security or tier 1 railroad retirement benefits,
•Deductible contributions to a traditional IRA or certain other qualified retirement plans under section 219,
•The student loan interest deduction,
•The tuition and fees deduction,
•The domestic production activities deduction,
•The deduction for one-half of self-employment tax,
•The exclusion from income of interest from series EE and I U.S. savings bonds used to pay higher education expenses, and
•Any excluded amounts under an employer's adoption assistance program.
Quite the list. It almost sounds like you take your total income (before the pre-AGI deductions) plus you have to add back the RE loss you are deducting. So the RE loss can't reduce your income below the $100K threshold, otherwise it won't be deductible.
As I said in the other post, there are likely better "tax guys" on the forum. I'm an auditor, but I do quite a bit of tax work as well so I do have some idea what the hell I'm talking about. However, I'm not the type that can quote all the rules off the cuff.