Housing Assistance: An Inventory of Fiscal Year 2010 Programs, Tax Expenditures, and Other Activities

U.S. Government Accountability Office

Administering Agency/Entity	Internal Revenue Service
Short Description	Exempts owners of rental real estate from “passive income’’ limitations. Generally, taxpayers are limited in their ability to deduct losses from passive activities like rental real estate against nonpassive income, such as wages, interest, and dividends. Rental real estate activities are generally considered passive activities (except for real estate professionals). The exemption from the general rules allows owners of rental real estate to deduct up to $25,000 in passive rental losses from their nonpassive income. The $25,000 loss allowance is reduced for taxpayers with modified adjusted gross income (MAGI) of more than $100,000 ($50,000 if married filing separately); and generally, there is no passive rental loss exemption for taxpayers with MAGI of $150,000 or more ($75,000 or more if married filing separately).
Primary Purpose	Assistance for rental property owners
Type of Housing Supported	Rental housing
Type of Assistance	Tax exclusion, exemption, or deduction
Estimated Revenue Loss1	$8,790,000,000