Loren owns three passive activities that had the following results for the current year:
$\begin{array}{ll}
\text { Passive Activity A } & \$ 25,000 \
\text { Passive Activity B } & (10,000) \
\text { Passive Activity C } & (40,000)
\end{array}$
If none of the passive activities are rental real estate activities,what is the amount of suspended loss attributable to Activity C?

Question

Quizplus · Accepted Answer

The total loss from passive activities B and C is $50,000. The income from passive activity A is $25,000, which can offset part of this loss. The remaining loss of $25,000 is allocated between B and C based on their respective losses. Activity C's loss is $40,000 out of the total $50,000 loss, so the suspended loss for C is $40,000/$50,000 * $25,000 = $20,000.

Loren Owns Three Passive Activities That Had the Following Results