Passive Activities
Response to the following problem:
A taxpayer owns three passive activities. Net income (loss) for each activity is shown below
|
Passive Activity
|
Net Income (or Loss)
|
|
1
|
$26,000
|
|
2
|
(13,500)
|
|
3
|
(18,000)
|
a. Compute the amount of passive loss that can offset passive income in the current year.
b. Determine the amount of passive loss that is carried forward to each activity.