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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16580
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have a client with a family llc. The llc is, in turn, has

Customer Question

Hi Chris. I have a client with a family llc. The llc is, in turn, has ownership in a real estate llc. The mom and dad of the llc are active members for purposes of loss recognition but the limited partner children are passive. The children have significant passive losses, from real estate entity loss flow through. Low and behold, the real estate entity reported cancellation of debt income to the partners of the family llc. Just wondering if any way the passive losses can offset cancellation of debt income?? I thx u so very much!
Submitted: 2 years ago.
Category: Tax
Expert:  Megan C replied 2 years ago.

Thanks for your question. Sorry to hear about your situation. Passive losses wipe out passive activity income -- except when you dispose of an activity you can take the suspended loss the year of the disposal. The COD income would not be able to use passive loss against it if the COD income

Wish I could tell you otherwise.

Please let me know if you need anything additional> If not, please rate positive.