complete the statements below regarding the real estate exception. the passive loss limits contain an exception related to real estate activities that is not restricted to real estate professionals. this exception allows individuals to deduct up to $fill in the blank 1 of losses from real estate rental activities against active and portfolio income. the potential annual deduction is reduced by fill in the blank 2 percent of the taxpayer's agi in excess of $fill in the blank 3 . to qualify for the exception, a taxpayer must meet of the following requirements: participate in the real estate rental activity. own fill in the blank 6 percent or more (in value) of all interests in the activity during the entire taxable year (or shorter period during which the taxpayer held an interest in the activity).