What happens when a taxpayer generates both passive income and losses?
for homework prob, im stuck with a solution.sounds simple but i spent like an hour trying to find an answer.
what happens when a taxpayer generates both passive income and losses ?
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Comments
The passive gains and losses are neted together. If the result is positive it is reported as ordinary income. If the result is a loss, the remaining loss gets carried forward to a year when it can be offset aginst future passive income.
yes, just as the person above said, they are blended to result in either a gain or a loss
The PIGs offset the PALs. Therefore, always look for PIGs (Passive income generators) for your PALs (Passive activity losses) if that helps you remember it.