Question
Harry and Hanna are married and file a joint return. They own a duplex, which is rented to others under a two-year lease. Harry and
Harry and Hanna are married and file a joint return. They own a duplex, which is rented to others under a two-year lease. Harry and Hanna are actively involved in overseeing the rental property in a number of ways. For example, they determine the terms of the leases, select tenants, and they decide if and when to make repairs. A net loss from the rentals was incurred in 2019 in the amount of ($35,000). Other relevant factors: Salary income $80,000 Interest income 10,000 Capital gain income 25,000 AGI (before considering the rental property) $115,000 Determine how much of the rental loss, if any, that Harry and Hanna may deduct in 2019 and the amount of their AGI after considering all factors. Also, indicate what happens to any nondeductible loss, if any, from the rental.
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