acct401gdb3reply - geothermal deposits oil and gas...

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RE: At-Risk limits are the cash from specific activity of an investment or credit liability to oneself. Passive Activity limits are where one organizes his or her income and loses into different areas. The three classifications are Active, portfolio, and passive income. The losses of passive activities only affect the income from it. The tax credits available for passive activities can only be applied to the income. There is an exception to deducting loss from normal income if one participates in it regularly. For instance, a passive activity is real estate property that is rented out. If one makes the operating decisions, than one can take the $25,000 tax deduction of the loss on one’s tax return. An At-risk activity would be this very similarly to passive activity; however, this is only about five activities that are considered at-risk. The five activities are the film industry, real estate, farming,
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Unformatted text preview: geothermal deposits, oil and gas resources, and any activity that is R&D. For example, if one was to explore for oil in a remote area could deduct the At-Risk loss. Reference Willis, E., Hoffman, W., Maloney, D., & Raabe, W. (2010) South-Western’s Federal Taxation: Comprehensive Volume (33rd ed.). Mason, OH: South-Western Cengage Learning. Klasser, J.D. "Loss Restrictions: Passive Activities and At-Risk Limits" Retrieved 24th April 2011. Webtax. "Can I take a tax deduction for a passive activity loss on my tax return. Retrieved 24th April 2011. TurboTax. "Real Estate tax and Rental Property" Retrieved 24th April 2011.
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acct401gdb3reply - geothermal deposits oil and gas...

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