Passive Activity Loss (PAL) Calculator 2026-2030

Tax Year & Filing Status

Tax Year

Every Section 469 dollar amount is fixed by statute and is not inflation-indexed, so results do not change by year. Rev. Proc. 2025-32 does not adjust Section 469.

Filing Status

Married filing separately and living together at any time during the year: no $25,000 allowance. IRC §469(i)(5)(B). Lived apart all year: $12,500 allowance and $50,000 phase-out start. IRC §469(i)(5)(A).

Activity Type & Amounts

Activity Type

A rental activity is passive even if you materially participate, unless you are a real estate professional. IRC §469(c)(2), (c)(7).

Current Year Net Loss from This Activity ($)

Enter as a positive number. The loss after basis and at-risk limits, before Section 469. Blank or negative counts as zero.

Prior Year Suspended Loss Carryforward ($)

Disallowed losses carried to the next year as deductions of the same activity. IRC §469(b). Form 8582 Part IV or V, column (c).

Net Passive Income from Other Passive Activities ($)

Passive losses offset passive income first. IRC §469(a), (d)(1). Enter net income only; if your other passive activities are net losses, enter zero and add those losses above.

Modified AGI ($)

AGI without passive activity losses, taxable Social Security, IRA deductions and certain other items. IRC §469(i)(3)(E); Form 8582 instructions, line 6. Used only for the rental allowance.

Actively Participate in the Rental?

Active participation is a lower standard than material participation. An interest under 10% by value, or a limited partner interest, does not qualify. IRC §469(i)(6)(A), (C). Rental real estate only.

Material Participation Tests • Temp. Reg. 1.469-5T(a)

Check all tests that apply to this activity. Meeting any one of the seven tests is material participation. For a non-rental business that makes it non-passive. For a rental it matters only if you are also a real estate professional (below). Your spouse's participation counts as yours. Temp. Reg. §1.469-5T(f)(3).

Test 1: more than 500 hours in the activity this year

Temp. Reg. §1.469-5T(a)(1). Hours may be shown by any reasonable means, including calendars and logs. §1.469-5T(f)(4).

Test 2: your participation was substantially all of the participation of all individuals

Temp. Reg. §1.469-5T(a)(2). Includes employees and non-owners.

Test 3: more than 100 hours, and not less than any other individual

Temp. Reg. §1.469-5T(a)(3). Compared with every individual who participates, including non-owners.

Test 4: significant participation activities totaling more than 500 hours

Temp. Reg. §1.469-5T(a)(4), (c). Each trade or business activity with more than 100 hours counts; the total across all of them must exceed 500 hours.

Test 5: materially participated in any 5 of the 10 preceding tax years

Temp. Reg. §1.469-5T(a)(5). The five years need not be consecutive.

Test 6: personal service activity and materially participated in any 3 preceding years

Temp. Reg. §1.469-5T(a)(6), (d). Health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, or another business where capital is not a material income-producing factor.

Test 7: facts and circumstances - regular, continuous, and substantial, over 100 hours

Temp. Reg. §1.469-5T(a)(7), (b). Not available at 100 hours or less, and management services may not count if others are paid to manage.

Real estate professional (rental real estate only). Both statutory requirements must be met, then you must still materially participate in the rental itself. IRC §469(c)(7)(A)-(B).

More than one-half of my personal services in all trades or businesses were in real property trades or businesses in which I materially participate

IRC §469(c)(7)(B)(i). On a joint return, either spouse must separately satisfy both requirements.

I performed more than 750 hours of services in real property trades or businesses in which I materially participate

IRC §469(c)(7)(B)(ii). Real property trade or business is defined in §469(c)(7)(C).

Results

Enter your information above.

Last verified: October 29, 2026

Projected figures are estimates and are not IRS-published. Every Section 469 amount in this tool is set by statute and is not indexed for inflation, so 2027 through 2030 use the same figures as 2026 unless Congress changes the law. Results are estimates for planning only.