5. Josh has investments in two passive activities. Activity A (acquired three years ago) produces income of $30,000 this year, while Activity B (acquired two years ago) produces a loss of $50,000. What are the amounts of Josh's deductible loss and suspended loss for the year?

Question

Itzel Curtis

Business

20 August, 08:40

5. Josh has investments in two passive activities. Activity A (acquired three years ago) produces income of $30,000 this year, while Activity B (acquired two years ago) produces a loss of $50,000. What are the amounts of Josh's deductible loss and suspended loss for the year?

+4

Answers (1)

Know the Answer?

Tatiana Santos · Answer 1

Answer: $30 000 loss is deductible, $20 000 is suspended

Explanation:

Passive losses are only deducted from passive income. deduction is limited to $500 000 for jointly married couples and $250 000 single tax payers.

Passive income is $30 000, therefore $ 30 000 out of the $50 000 loss is deductible, the suspended loss is $20 000