Art's atrisk amount in a passive activity was $60,000 at the beginning of 2013.His loss from the activity in 2013 is $80,000,and he had no passive activity income during the year.Art had $20,000 of passive income from the activity in 2014.Under the passive loss rules,Art's suspended loss at the end of 2014 is:

Question

Art's at­risk amount in a passive activity was $60,000 at the beginning of 2013.His loss from the activity in 2013 is $80,000,and he had no passive activity income during the year.Art had $20,000 of passive income from the activity in 2014.Under the passive loss rules,Art's suspended loss at the end of 2014 is:

Quizplus · Accepted Answer

In 2013,Art had an $80,000 loss,$20,000 of which was suspended under the at-risk rules;$60,000 was suspended under the passive loss rules.The $20,000 of passive income in 2014 increases Art's at-risk amount and allows for reclassification as a passive loss $20,000 of the 2013 loss suspended under the at-risk rules.Therefore,Art has a total loss of $60,000 suspended under the passive loss rules ($60,000 in 2013 + $20,000 reclassified in 2014 - $20,000 of passive losses offset against passive income).

Art's At­risk Amount in a Passive Activity Was $60,000 at the Beginning

Art's Atrisk Amount in a Passive Activity Was $60,000 at the Beginning