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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
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Experience:  Over 20 Years experience
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Team, Passive loses: How can I reduce passive losses. How

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Passive loses:

How can I reduce passive losses.

How can I defer passive loss "expenses" to future years and is that a good way to cut expensives.


Randalltax :

Elvin thanks for the tax question.

Randalltax :

Passive losses are limited when your income goes over a certain level.

Randalltax :

The losses are not "lost" themselves. A passive loss is carried forward indefinitely until one of three events:

Randalltax :

1) You have passive gains which the losses can offset

Randalltax :

2) You sell the investment yielding the passive losses. This automatically releases all of the passive losses for this activity and you take the loss in the current tax year

Randalltax :

3) Your income drops below the limiting threshold and releases some or all of the passive losses.



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