Wes's atrisk amount in a passive activity is $25,000 at the beginning of the current year.His current loss from the activity is $35,000 and he has no passive activity income.At the end of the current year,which of the following statements is incorrect?

Question

Wes's at­risk amount in a passive activity is $25,000 at the beginning of the current year.His current loss from the activity is $35,000 and he has no passive activity income.At the end of the current year,which of the following statements is incorrect?

Quizplus · Accepted Answer

The at-risk amount of $25,000 is reduced to zero by $25,000 of the passive loss.As a result,the $10,000 unused loss is suspended under the at-risk rules.The $25,000 of passive loss is suspended under the passive loss rules because Wes has no passive income.

Wes's At­risk Amount in a Passive Activity Is $25,000 at the Beginning

Wes's Atrisk Amount in a Passive Activity Is $25,000 at the Beginning