8582 Passive Activities Losses

[Terry D EA]

Is there any other way to utilize the loss from form 8582 that is disallowed in the current year due to the income limitations that is legitimate. I have read some suggestions there may be some other way other than using the real estate professional loop hole which my client does not meet the criteria. Just wondering.

[schirallicpa]

gotta love the 8582.  2 years from now you'll have this nice extra loss offset that you forgot about....because they had passive income again.

I had a doctor play that game for a long time with a partnership he was involved in.  Then a few years later he started renting his old house and moved to the country.  And wha-la - we finally got our passive losses coming back.  It actually turned out well for him.  He was planning ahead.

[Terry D EA]

I looked at the possibility of putting funds into an IRA to reduce the income but even maxing out the IRA deductions won't help trigger the loss. Does reduce the balance due but to me it is too much out of pocket to save a little and taking liquid funds and locking them up.

[joanmcq]

Ask the client what they want to do. Because except for IRA deductions there ain't much you can do to reduce their income. And no, passive losses c/f until passive income. They'll like it when they sell the property. Or tell them to just stop making so much money.

[Terry D EA]

Yeah at some point I would like to experience that "making so much money" thing. I guess on the other hand I don't have to worry about all of those pesky phase-outs.