In 2015,Glenn had 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 2015,Glenn can deduct $108,000 for regular income tax purposes and for AMT purposes.
B)Glenn will have a $108,000 tax preference in 2015 as a result of the passive activity.
C)For regular income tax purposes,none of the loss is allowed in 2015.
D)In 2015,Glenn will have a positive adjustment of $25,000 as a result of the passive loss.
E)None of the above.

Question

Quizplus · Accepted Answer

In general, passive losses can only be offset against passive income or carried forward to future years. However, there are certain exceptions and limitations that may allow for the immediate deduction of passive losses in certain situations. Based on the information provided, it seems that none of these exceptions or limitations apply to Glenn's situation, so the passive loss cannot be deducted for regular income tax purposes in 2015. The other options are incorrect: A is wrong because the loss cannot be deducted for AMT purposes either; B is wrong because there is no indication that the loss is a tax preference item; D is wrong because there is no information about a positive adjustment or any other type of adjustment.

In 2015,Glenn Had a $108,000 Loss on a Passive Activity