RENTAL REAL ESTATE LOSS ALLOWANCE

A federal tax deduction of up to $25,000 that is available to non-real estate professionals who own at least a 10% interest in a rental property that they actively manage and that operates at a loss during a particular tax year. Under the tax code, losses from passive activities such as rental real estate ownership normally cannot be deducted from income; the rental real estate loss allowance provides an exception to that rule.