In 2014, Glenn had a $108,000 loss on a passive activity. None of the loss is attributable to AMT adjustments or preferences. She has no other passive activities. Which of the following statements is correct?
A) In 2014, Glenn can deduct $108,000 for regular income tax purposes and for AMT purposes.
B) Glenn will have a $108,000 tax preference in 2014 as a result of the passive activity.
C) For regular income tax purposes, none of the loss is allowed in 2014.
D) In 2014, Glenn will have a positive adjustment of $25,000 as a result of the passive loss.
E) None of the above.

Question

Quizplus · Accepted Answer

Passive activity losses can only be offset against passive activity income or carried forward to future years when there is passive activity income. Therefore, for regular income tax purposes, none of the loss is allowed in 2014.

In 2014, Glenn Had a $108,000 Loss on a Passive