In the current year, Louise invests $50,000 for a 10% interest in a passive activity.Her share of the loss this year is $10,000.If this is her only passive activity, the $10,000 loss from the activity this year is suspended for use in a future year.

Question

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Passive activity losses can only be deducted against passive income. If Louise has no other passive income, the $10,000 loss is suspended and carried forward to offset future passive income.

In the Current Year, Louise Invests $50,000 for a 10