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Which of the following statements is true when considering the deductibility of a suspended passive loss?

a) Fully deductible in the current year
b) Carried forward to future years
c) Deductible only in the year incurred
d) Not subject to any deduction rules

User Tijko
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1 Answer

3 votes

Final answer:

The correct statement regarding the deductibility of a suspended passive loss is that it is carried forward to future years.

Step-by-step explanation:

The correct answer is b) Carried forward to future years. When it comes to the deductibility of a suspended passive loss, it cannot be fully deductible in the current year (option a) or deductible only in the year incurred (option c). The suspended passive loss can be carried forward to future years and offset against future passive income or against any gain from the sale of the passive activity.

User Oliver Nightingale
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