Passive activity loss rules quietly limit how much rental and passive losses you can deduct each year. This week's Tax Tip Tuesday breaks down the income phase-outs, Real Estate Professional Status traps, and documentation gaps that turn a legitimate loss into an audit flag.

Schedule E is one of the most scrutinized sections of your tax return. From rental losses to K-1 mismatches to passive activity rules, the IRS is watching — and documentation is everything.