or [section] 212, subject to the passive activity loss
would be analogous to the benefit of the passive activity loss
X corporation's taxable income for 1993 would be computed as follows: Gross income $200,000 Total deductions $195,000 Reduced by suspended passive activity loss
(20,000) Allowable deductions (175,000) Taxable income $ 25,000
Under similar facts, the Tenth Circuit held that the suspended losses were deductible by the S corporation under the passive activity loss
The passive activity loss
rules are avoided whenever the taxpayer materially participates in a nonrental activity.
469 passive activity loss
rules for the rental real estate activity by meeting the material participation standards of Sec.
Many developers are unable to effectively utilize tax credits because of alternative minimum tax requirements and passive activity loss
Finally, the passive activity loss
rules reduce his deductible loss to zero.
Unlike a suspended passive activity loss
, which is deductible upon the disposition of the taxpayer's interest in the activity, disallowed passive activity credits will not be able to be used after the disposition of the interest unless the taxpayer has passive income from other activities.
All noncorporate taxpayers, including pass-through entities such as estates and trusts, are subject to the passive activity loss
(PAL) rules of IRC Sec.
Because this LLC is treated as a partnership," he said, "the passive activity loss
rules will apply to the Members of the LLC, and if there is a particular member not participating, they will suspend LLC losses at the member level and not use them.
8) The excess of the passive activity loss
over the taxpayer's passive activity income, plus the disallowed passive activity credit, is treated as a deduction or credit in the next year.