Unformatted text preview: In 2006, Jane has a suspended passive loss of $20,000. 2007 : Again, the passive loss limitation prevents Jane from deducting the loss. She now has a $35,000 ($20,000 + $15,000) suspended passive loss at the end of 2007. 2008 : Since the business earns $11,000 in 2008 Jane can use some of the suspended passive loss to offset her $11,000 income from the orange grove leaving her with a remaining suspended passive loss of $24,000 ($35,000 – $11,000). 2009 : Jane can deduct the entire passive loss carryover of $22,000 resulting in a deductible net passive loss of $11,000 for the year ($13,000 gain – $24,000). As she sold her complete interest in the business she can deduct the full amount of the suspended loss even though the amount of the loss is greater than the gain from the sale....
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This note was uploaded on 03/03/2010 for the course ACG 6845 taught by Professor Kelliher during the Spring '09 term at University of Central Florida.
- Spring '09