Rachel acquired a passive activity several years ago.Until 2007,the activity was profitable,and Rachel's at-risk amount at the beginning of 2007 was $300,000.The activity produced losses for Rachel of $80,000 in 2007,$50,000 in 2008,and $70,000 in 2009.In 2010,the activity produced income of $90,000.How much is Rachel's suspended passive loss at the beginning of 2011?

Question

Quizplus · Accepted Answer

Rachel's total losses from 2007 to 2009 were $200,000 ($80,000 + $50,000 + $70,000). Her at-risk amount was $300,000, so all losses were allowed. In 2010, she had income of $90,000, reducing her suspended losses to $110,000 ($200,000 - $90,000).

Rachel Acquired a Passive Activity Several Years Ago