Several years ago,Joy acquired a passive activity.Until 2008,the activity was profitable.Joy's at-risk amount at the beginning of 2008 was $250,000.The activity produced losses of $100,000 in 2008,$80,000 in 2009,and $90,000 in 2010.During the same period,no passive income was recognized.How much is suspended under the at-risk rules and the passive loss rules at the beginning of 2011? At-risk Passive loss

Question

Quizplus · Accepted Answer

Joy's at-risk amount decreases by the losses each year: $250,000 - $100,000 (2008) - $80,000 (2009) = $70,000 at the end of 2009. In 2010, $70,000 of the $90,000 loss is allowed under the at-risk rules, leaving $20,000 suspended. The total passive loss is $100,000 (2008) + $80,000 (2009) + $20,000 (2010) = $250,000.

Several Years Ago,Joy Acquired a Passive Activity