David Jacob, a salaried person, incurred a loss of $4,000 from passive activities. This loss can be applied as a deduction to offset taxable income from:

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Passive activity losses can only be deducted against passive activity income, unless the taxpayer qualifies as a real estate professional, or materially participates in the activity. Since David Jacob is a salaried person, he is unlikely to qualify as a real estate professional or materially participate in any passive activities. Therefore, his passive activity loss can only be applied as a deduction to offset taxable income from his salary.

David Jacob, a Salaried Person, Incurred a Loss of $4,000