Peach Company,a closely held C corporation,incurs a $58,000 loss on a passive activity during the year.The company has active income of $34,000 and portfolio income of $24,000.If Peach is a not a personal service corporation,it may deduct the entire $58,000 passive loss.

Question

Quizplus · Accepted Answer

A closely held C corporation can only offset passive losses against active income, not portfolio income. Therefore, Peach Company can only deduct $34,000 of the passive loss against its active income.

Peach Company,a Closely Held C Corporation,incurs a $58,000 Loss on a Passive