Feature Articles
Unlock Bigger Deductions on Rental Real Estate
Rental real estate losses are typically categorized as passive losses, which can only offset passive income. However, qualifying for the Real Estate Professional exception allows taxpayers to treat rental losses as nonpassive write-offs against ordinary income.
Qualifying Requirements
- Spend more than 750 hours during the tax year performing personal services in real estate trades or businesses in which you materially participate; and
- Devote more than 50% of your total working hours to those real estate activities.
For those who do not qualify as real estate professionals, the Small Landlord Exception permits up to $25,000 in active participation rental losses for taxpayers with AGIs below $100,000 (phasing out at $150,000).
Estate Planning for 2026 and Beyond
Federal estate and gift tax lifetime exemptions have been permanently stabilized at $15 million per individual (adjusted for inflation) under recent legislation, eliminating the prior year-end sunset concern and opening long-term wealth transfer strategies.
Taking Control With Self-Directed IRAs
Self-directed IRAs allow retirement funds to be deployed into alternative investments such as private equity and physical real estate, but strict prohibited transaction rules require careful oversight.
Tax Tips
- 2026 Tax Law Changes for Businesses: Review updated bonus depreciation phaseouts and interest deduction limitations under Section 163(j).
- Tax Breaks After Divorce: The custodial parent generally claims dependency credits unless Form 8332 explicitly releases the claim to the noncustodial parent.
- Closing a Business: Ensure you file final federal and state payroll returns, cancel your EIN, and liquidate assets while retaining accounting books.
