Module 4: Loss Limitations for Individuals

Question 1

Net losses in access of the at-risk amount for an activity

Answer 1

Rule: any losses in access of the at risk amount are suspended and carried forward without expiration and are deductible against income in future years from that activity

Question 2

Passive activity losses

Answer 2

deducted only to the extent of income from all passive activities

does not materially participate

Question 3

Exception to passive activity loss rules

Answer 3

• 25,000 and active
• own at least 10% of the rental activity
• Phase out: AGI exceeds 150k
• 25k is reduced by 50% of taxpayers AGI over 100k