Rachel acquired a passive activity several years ago.Until 2008,the activity was profitable,and Rachel's at-risk amount at the beginning of 2008 was $300,000.The activity produced losses for Rachel of $80,000 in 2008,$50,000 in 2009,and $70,000 in 2010.In 2011,the activity produced income of $90,000.How much is Rachel's suspended passive loss at the beginning of 2012?

Question

Quizplus · Accepted Answer

Rachel's total losses from 2008 to 2010 were $200,000 ($80,000 + $50,000 + $70,000). In 2011, she had income of $90,000, which offsets part of the losses. Therefore, the suspended passive loss at the beginning of 2012 is $110,000 ($200,000 - $90,000).

Rachel Acquired a Passive Activity Several Years Ago