The Tax Cuts and Jobs Act of 2017 did not make any direct changes to the passive activity loss rules. Those with rental real estate and income below a set amount may still be able to deduct up to $25,000 of rental losses annually.
Items, such as interest, state and local income and sales taxes, charitable contributions, and medical deductions, claimed on Schedule A of Form 1040. Itemized deductions are subtracted from adjusted gross income to arrive at taxable income. The amount of itemized deductions is also subject to a reduction when adjusted gross income exceeds certain limits.