We purchased a vacation home last Aug. that we also rent out when we don't use it. While doing my 2008 taxes, I figured that we had a $5000 loss on the property due to depreciation, morg deduction, taxes, etc, yet Turbo Tax says my $5000 loss is not allowed. Could it be that we also fall into the Alternative Minimum Tax trap? I always thought that having real estate, even a second home, would help hedge tax liability. Am I wrong? How does AMT affect rental income?
Thanks!