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Sch E limitation

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📊 Maximum Special Allowance

Use this when you need to find the maximum special allowance amount for your tax year.

Maximum special allowance. The maximum special allowance is:

• $25,000 for single individuals and married individuals filing a joint return for the tax year,
• $12,500 for married individuals who file separate returns for the tax year and lived apart from their spouses at all times during the tax year, and
• $25,000 for a qualifying estate reduced by the special allowance for which the surviving spouse qualified.

📊 How MAGI Affects Your Special Allowance

Use this when you need to determine how much you can deduct based on your MAGI.

If your modified adjusted gross income (MAGI) is $100,000 or less ($50,000 or less if married filing separately), you can deduct your loss up to the amount specified above.

If your MAGI is more than $100,000 (more than $50,000 if married filing separately), your special allowance is limited to 50% of the difference between $150,000 ($75,000 if married filing separately) and your MAGI.

📊 When There Is No Special Allowance

Use this when you want to know whether you qualify for any special allowance.

Generally, if your MAGI is $150,000 or more ($75,000 or more if you are married filing separately), there is no special allowance

Tags: federal,form