Comments on: What happens when a taxpayer generates both passive income and losses?

By: will_work_for_trump

will_work_for_trump — Wed, 10 Feb 2010 15:07:30 +0000

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.

By: greffy

greffy — Wed, 10 Feb 2010 14:21:00 +0000

yes, just as the person above said, they are blended to result in either a gain or a loss

By: cwald888

cwald888 — Wed, 10 Feb 2010 14:15:54 +0000

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.