A taxpayer may deduct suspended losses of a passive activity when the taxpayer completely terminates his or her ownership of the activity.

Question

Quizplus · Accepted Answer

When a taxpayer completely terminates his or her ownership of a passive activity, any suspended losses from that activity can be deducted in the year of the disposition. This rule applies whether the activity is disposed of by sale, exchange, or other disposition.

A Taxpayer May Deduct Suspended Losses of a Passive Activity