This scope encompasses the rules and regulations governing the limitations on the deductibility of losses from passive activities—where a taxpayer does not materially participate—and from investments or businesses where the taxpayer is considered at risk for an amount equal to the money and adjusted basis of property contributed to the activity. It involves understanding the restrictions in place to prevent inflated deductions and ensuring that losses claimed reflect legitimate economic activity to which the taxpayer is genuinely exposed to economic risk.

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Lesson Videos

Passive Activity Losses & Loss Limitations Overview

Introduction to Passive Activity Losses and Loss Limitations

Recourse vs. Nonrecourse Liabilities

Tax Basis vs. At-Risk Basis

Types of Income

Capital Losses

Passive Activity Losses and Limitations

Passive Activity Losses & Loss Limitations Summary

Passive Activity Losses & Loss Limitations - Practice Questions

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