The Mann Report published an article by Tax Director Joseph Mecagni, about taking large rental losses.
The Mann Report
By Joseph Mecagni, Director, Tax & Business Services
If the taxpayer can establish material participation, the rental activities will be non-passive and can be deducted against income such as W2, interest, dividends, capital gains, retirement distributions and Social Security. For audit protection, it is important that a detailed log and supporting documentation be maintained.