Josh has investments in two passive activities.Activity A,acquired three years ago,produces income in the current year of $60,000.Activity B,acquired last year,produces a loss of $100,000 in the current year.At the beginning of this year,Josh's atrisk amounts in Activities A and B are $10,000 and $100,000,respectively.What is the amount of Josh's suspended passive loss with respect to these activities at the end of the current year?

Question

Josh has investments in two passive activities.Activity A,acquired three years ago,produces income in the current year of $60,000.Activity B,acquired last year,produces a loss of $100,000 in the current year.At the beginning of this year,Josh's at­risk amounts in Activities A and B are $10,000 and $100,000,respectively.What is the amount of Josh's suspended passive loss with respect to these activities at the end of the current year?

Quizplus · Accepted Answer

The $60,000 of passive income from Activity A is offset by $60,000 of the passive loss from Activity B,leaving a net passive loss of $40,000.None of the $40,000 net passive loss is deductible in the current year.The $40,000 net passive loss is suspended.

Josh Has Investments in Two Passive Activities