Self-employed health insurance & rental losses

[electriceagle]

Does anyone know how rental losses affect the amount of self-employed health insurance deductions?

Imagine the following:
- Schedule C with profit $C
- Schedule E rental profit $E1
- Schedule E rental loss (active participation) $E2
- ACA health insurance $H

Without the rental loss, the deduction from ACA self-employed insurance is limited to $C.

With the rental loss, is it limited to $C-$E2? or $C-($E2-$E1)? Is there a ratio somewhere?

[Papa bear]

Can’t comment on the ACA, but passive activity losses from real estate are limited by income and are phased out.  They are also capped at 25k.

So either use some real numbers or adjust your algebra equation to add some if statements. 




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[SeattleCPA]

...passive activity losses from real estate are limited by income and are phased out.  They are also capped at 25k.

Passive losses aren't limited by income. In many cases, they are suspended (delayed) but they will be used eventually for everyone.

Also note that in a number of situations, passive losses aren't suspended: real estate professionals, short-term vacation rentals and some other cases too.

Note: This blog post, Vacation Rental Tax Shelters, describes the three most common situations in which passive losses aren't suspended.

Also, @electriceagle ? I think the picture is a little cloudy without the details and as @Papa bear mentions, but basically you need self-employment income (such as from the Schedule C) to qualify for the self-employed health insurance deduction. E.g., for a $10K SE health insurance deduction, you need $10K of SE earnings.