I know you guys are working hard to help us understand this tax thing, but this quote definitely reflects how I feel often times
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I recently consulted with a CPA for tax preparation purposes and was talking about losses in my Short Term Rental (put into service in 2022). The CPA brought to my attention that the losses I could use to offset my w-2 (assuming I qualify for “Material Participation”) are capped by the money I’ve put into the rental. He described this as the “At-Risk Rule” and said the figure (cap) is the total cost of upgrades and renovations, principle paid on mortgage (prior to being put into service - since it WAS my primary residence from 2018-22), down payment, and closing costs.
Can you guys talk about this?
Thank you!