Tax and rental income

[dragonwalker]

My wife and I were married last year and we are filing married and jointly for the first time this year. We live in CA. I own a condo that I was partially renting and in 2024 I am claiming that I rented the entire unit. Our accountant determined after expenses that the property resulting in a net loss of about $10K. However, our total AGI is about $380K. From what I read online, we have well exceeded the threshold at which we can deduct losses from rental property. However, our accountant is writing this $10K against our AGI on line 8 of the 1040. Is our accountant wrong or am I overlooking something? 

[SeattleCPA]

My wife and I were married last year and we are filing married and jointly for the first time this year. We live in CA. I own a condo that I was partially renting and in 2024 I am claiming that I rented the entire unit. Our accountant determined after expenses that the property resulting in a net loss of about $10K. However, our total AGI is about $380K. From what I read online, we have well exceeded the threshold at which we can deduct losses from rental property. However, our accountant is writing this $10K against our AGI on line 8 of the 1040. Is our accountant wrong or am I overlooking something?

Passive losses typically aren't deductible. (A passive loss is a loss from an activity where you don't materially participate or any rental activity.)

But there are about a dozen ways to dodge the passive loss limitation. It's very possible your accountant is appropriately using one of those. Here's a blog post I did with a list of the "ways":

https://evergreensmallbusiness.com/dozen-ways-to-deduct-real-estate-losses/

BTW generalization, unless you're or your spouse is a real estate professional or the condo is a short-term rental, it seems like it'd be hard to take the loss. But again, there are a bunch of ways to legitimately claim the loss.