Losses associated with a passive activity owned by an individual are not deductible against active income or portfolio income in computing either the regular income tax or the AMT.

Question

Quizplus · Accepted Answer

Losses from passive activities can only be offset against income from other passive activities or carried forward to future years when there is sufficient passive income to offset them. They cannot be used to reduce taxes on active or portfolio income.

Losses Associated with a Passive Activity Owned by an Individual