Passive losses that exceed passive income are deferred until the taxpayer generates passive income to offset these passive losses or until the taxpayer disposes of that activity.

Question

Quizplus · Accepted Answer

This statement is true. Passive losses cannot be used to offset other types of income and are instead deferred until the taxpayer generates passive income to offset them or disposes of the activity that generated the losses.

Passive Losses That Exceed Passive Income Are Deferred Until the Taxpayer