Roger owns and actively participates in the operations of an apartment building which produces a $40,000 loss during the year. He has AGI of $150,000 from an active business. He may deduct $25,000 of the loss.

Question

Quizplus · Accepted Answer

The passive activity loss rules limit the deduction of losses from passive activities, such as rental real estate, unless the taxpayer actively participates and has an AGI of $100,000 or less. Since Roger's AGI is $150,000, he cannot deduct the $25,000 loss.

Roger Owns and Actively Participates in the Operations of an Apartment