Susan owns fifty percent and is a material partipant in a clothing store for the

Question

Susan owns fifty percent and is a material partipant in a clothing store for the past 15 years. Susan retires from the clothing store at the end of 2013 and does not participate any more in that activity. She also is a material participant in a yoga business, of which she also owns fifty percent. Since Susan loves yoga, she continues to actively participant in that activity. In 2014, Susan's share of the yoga business' loss was $40,000. In addition, Susan's share of the clothing store's income in 2014 was $75,000. Susan does not own any other businesses. Can Susan offset or deduct any of the $40,000? If so, please explain why or why not?

Explanation / Answer

susan can deduct $40,000 from profit from Clothing store activity $75000.because it is not a speculation businesss so we can deduct $40,000 from profit from Clothing store.

Net profit=$75,000-$40,000=$35,000

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