Asked by Jacob Beyers on Jun 06, 2024
Verified
Two equal partners involved in a passive activity with identical passive losses from that activity may be allowed to deduct different amounts of the losses on their own tax returns.
Passive Activity
Economic endeavors in which a person is not actively involved on a regular, continuous, or substantial basis, often related to investment income.
Passive Losses
Financial losses occurring from income-generating activities in which the taxpayer does not materially participate, often subject to specific tax rules.
- Identify how passive loss rules regulate the deduction of business activity losses.
Verified Answer
SN
Stephen NagatoshiJun 12, 2024
Final Answer :
True
Explanation :
This is true. The amount that each partner may deduct is determined by their individual basis in the partnership, which can differ between partners even if they have equal ownership interests.
Learning Objectives
- Identify how passive loss rules regulate the deduction of business activity losses.
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