$LevyIO

Passive Activity Loss Deduction in Arlington, VA 2026

Calculate your passive activity loss deduction tax savings in Arlington, Virginia. With Virginia's 5.75% state tax rate, your combined savings are higher.

Virginia Tax Context

State Income Tax
5.75%
Local Income Tax
None
Property Tax Rate
0.99%
Tax Burden
Very High

Pentagon; Amazon HQ2; DC suburb with very high incomes

$1,388
Est. Total Savings
$25,000
Max Deduction
Both Methods
Deduction Type
27.8%
Combined Tax Rate

Passive Activity Loss Deduction Savings Calculator for Arlington

$
$

Federal Savings

$1,100

22% bracket

Virginia State

$288

5.75% rate

Local Tax

$0

0% rate

Total Savings

$1,388

27.8% combined

At a 27.8% combined tax rate in Arlington, every $1,000 in deductions saves you $278 in taxes.

Savings by Tax Bracket in Arlington

10%
$788
12%
$888
22%
$1,388
24%
$1,488
32%
$1,888
35%
$2,038
37%
$2,138

Includes 5.75% Virginia state tax on top of federal savings.

Eligibility Requirements

Taxpayers with passive losses from rental or business activities with limited participation

  • 1Active participation in rental real estate allows up to $25K
  • 2Phase-out begins at $100K AGI, fully phased out at $150K
  • 3Suspended losses deductible when activity is disposed

Virginia residents should verify that this deduction is also recognized on their state tax return for additional savings of up to 5.75%.

Common Mistakes to Avoid

  • !Not tracking suspended passive losses across years
  • !Missing the active participation exception for rentals
  • !Not fully disposing of activity to release suspended losses
  • !Forgetting to claim the deduction on your Virginia state return (missing 5.75% additional savings)

Required Tax Forms

Form 8582Schedule E

File these forms with your federal tax return to claim the passive activity loss deduction. Virginia may require additional state-specific forms.

Other Tax Deductions in Arlington, VA

Capital Loss Deduction

Investment

~$833
est. savings

Tax-Loss Harvesting

Investment

~$6,307
est. savings

Investment Interest Expense

Investment

~$1,892
est. savings

Qualified Dividend Tax Rate

Investment

~$3,784
est. savings

Opportunity Zone Investment

Investment

~$12,614
est. savings

1031 Like-Kind Exchange

Investment

~$37,841
est. savings

QSBS Exclusion (Section 1202)

Investment

~$126,136
est. savings

Installment Sale

Investment

~$10,091
est. savings

Passive Activity Loss Deduction in Other Virginia Cities

Virginia Beach, VA

5.75% state tax

~$6,307
+4,919 vs Arlington

Chesapeake, VA

5.75% state tax

~$6,307
+4,919 vs Arlington

Norfolk, VA

5.75% state tax

~$6,307
+4,919 vs Arlington

Richmond, VA

5.75% state tax

~$6,307
+4,919 vs Arlington

Newport News, VA

5.75% state tax

~$6,307
+4,919 vs Arlington

Alexandria, VA

5.75% state tax

~$6,307
+4,919 vs Arlington

Hampton, VA

5.75% state tax

~$6,307
+4,919 vs Arlington

Roanoke, VA

5.75% state tax

~$6,307
+4,919 vs Arlington

Calculate Your Full Tax Savings in Arlington

Use our free tax calculators to optimize your entire tax return for Virginia.

Income Tax CalculatorTaxes in ArlingtonFull Passive Activity Loss Deduction Guide

Frequently Asked Questions

How much can I save with the Passive Activity Loss Deduction in Arlington, VA?

In Arlington, Virginia, the passive activity loss deduction can save you an estimated $1,388 per year. This includes $1,100 in federal tax savings and $288 in Virginia state tax savings. The national average savings is $5,000/year.

What is the Virginia state income tax rate for Arlington residents?

Virginia has a 5.75% state income tax rate. Arlington residents have no additional local income tax. Pentagon; Amazon HQ2; DC suburb with very high incomes

Who qualifies for the Passive Activity Loss Deduction in Arlington?

Taxpayers with passive losses from rental or business activities with limited participation. The eligibility requirements are the same whether you live in Arlington or elsewhere in the U.S., as this is a federal tax deduction. However, your savings amount will vary based on Virginia's 5.75% state tax rate.

What tax forms do I need to claim the Passive Activity Loss Deduction in Virginia?

To claim the passive activity loss deduction, you need to file Form 8582 and Schedule E with your federal return. Virginia residents should also check if the state allows this deduction on their state return, which could provide an additional 5.75% savings. Filing status affects your deduction limits and tax bracket.

Is the Passive Activity Loss Deduction better in Arlington than in states without income tax?

Yes, Arlington residents benefit more because Virginia's 5.75% state income tax means the deduction reduces both your federal AND state tax liability. In states with no income tax (like Texas, Florida, or Nevada), this deduction only reduces federal taxes. Your combined rate of 27.8% means more savings per dollar deducted.

Related Calculators

Capital Loss Deduction in Arlington

Avg savings: $660/year

Tax-Loss Harvesting in Arlington

Avg savings: $5,000/year

Investment Interest Expense in Arlington

Avg savings: $1,500/year

Qualified Dividend Tax Rate in Arlington

Avg savings: $3,000/year

Opportunity Zone Investment in Arlington

Avg savings: $10,000/year

1031 Like-Kind Exchange in Arlington

Avg savings: $30,000/year