What is the maximum Rental Activity Loss you can claim if you file MFS and did not live together?

When filing as Married Filing Separately (MFS) and not living together, the allowable deduction for rental activity losses is significantly limited. Under IRS regulations, individuals in this filing status cannot claim a rental loss unless certain conditions are met. If both spouses are not living together at any time during the year, the IRS disallows rental losses, leading to the conclusion that the maximum rental activity loss that can be claimed is indeed $0.

In general, taxpayers filing MFS face more restrictions compared to those filing jointly, particularly regarding passive activity losses, which include rental losses. This penalty restricts the ability to offset income with losses derived from rental activities, reinforcing that without living together, the possibility of claiming any rental loss is effectively ruled out.