A passive loss includes a loss from the sale of an investment such as stock of a publicly held company like IBM where the taxpayer is merely an investor and does not work for the company.

Question

Quizplus · Accepted Answer

A passive loss typically refers to losses incurred from business activities in which the taxpayer does not materially participate, and does not include losses from the sale of investments like stocks of publicly held companies.

A Passive Loss Includes a Loss from the Sale of an Investment