In 2019, Glenn recorded 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 2019, Glenn can deduct $108,000 for regular income tax purposes and for AMT purposes.
B)Glenn reports a $108,000 tax preference in 2019 as a result of the passive activity.
C)For regular income tax purposes, none of the passive activity loss is allowed in 2019.
D)In 2019, Glenn reports a positive adjustment of $25,000 as a result of the passive activity loss.

Question

Quizplus · Accepted Answer

For regular income tax purposes, none of the passive activity loss is allowed in 2019 because Glenn has no other passive activities to offset the loss against. However, the loss can be carried forward indefinitely to offset future passive activity income or gain. Option A is incorrect because Glenn cannot deduct the loss for regular income tax purposes. Option B is incorrect because there are no AMT adjustments or preferences associated with the loss. Option D is incorrect because there is no information given to suggest a positive adjustment of $25,000.

In 2019, Glenn Recorded a $108,000 Loss on a Passive