In most cases, all rental real estate activities (except those of certain real estate professionals) are passive activities. For this purpose, a rental activity is an activity from which you receive income mainly for the use of tangible property, rather than for services.

Deductions or losses from passive activities are limited. You generally cannot offset income, other than passive income, with losses from passive activities. Nor can you offset taxes on income, other than passive income, with credits resulting from passive activities. Any excess loss or credit is carried forward to the next tax year. Exceptions to the rules for figuring passive activity limits for rental real estate with active participation.

Please discuss:

1. Active participation and Maximum special allowance for rental loss deduction

2. Phase out of special allowance

3. How to qualify as Real Estate Professional and its tax benefit.

4. Leaving comment on your peer's post.