Jerry's at-risk amount in a passive activity is $100,000 at the beginning of the current year.His current loss from the activity is $45,000.Jerry had no passive activity income during the year.At the end of the current year:

Question

Quizplus · Accepted Answer

Jerry's at-risk amount decreases by the amount of the current year's loss, which is $45,000. Therefore, his at-risk amount at the end of the current year is $100,000 - $45,000 = $55,000. Since he had no passive activity income during the year, the entire $45,000 loss is suspended and carried forward to future years. Therefore, the correct answer is choice A.

Jerry's At-Risk Amount in a Passive Activity Is $100,000 at the Beginning