Judy acquired passive Activity A in January 2013 and Activity B in July 2014. Until 2018, Activity A was profitable. Activity A produced a loss of $39,500 in 2018 and a loss of $69,500 in 2019. She has $33,500 passive income from Activity B in 2018 and $21,500 in 2019. After offsetting passive income, how much of the net losses may she deduct?

Question

Business

Rory Frost

18 November, 01:28

Judy acquired passive Activity A in January 2013 and Activity B in July 2014. Until 2018, Activity A was profitable. Activity A produced a loss of $39,500 in 2018 and a loss of $69,500 in 2019. She has $33,500 passive income from Activity B in 2018 and $21,500 in 2019. After offsetting passive income, how much of the net losses may she deduct?

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Answers (1)

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Quentin Sexton · Answer 1

Judy may deduct $54,000 of the net losses.

Explanation:

2018 Passive Activity Limitations $39,500

Passive Income ($33,500) - loss allowed to the extent of passive income

Suspended Passive Activity Limitations $6,000

2019 Passive Activity Limitations $69,500

Passive Income ($21,500) - loss allowed to the extent of passive income

Suspended Passive Activity Limitations $48,000

$54,000 Suspended Passive Activity Limitations