At the beginning of the year, Amber has a carryover of unused losses in the amou

Question

At the beginning of the year, Amber has a carryover of unused losses in the amount of $1,250 under the at-risk rules and $2,000 under the passive loss rules. In the current year, Amber has no gain or loss from her passive activity, however she contributes $6,000 to the passive activity. She has no other passive income for the year.

At year-end, Amber has the following: (if an amount is zero, enter "0"). Adjusted basis and an at-risk amount in the passive activity: $

Suspended losses under the at-risk rules: $

Suspended passive losses: $

Explanation / Answer

1] The adjusted basis and at risk amount in the passive activity = $4,750

2] Suspended losses under the at-risk rules is nil or 0

3] suspended loss is occured as a result of passive activities and can only be carried forward. these losses are suspended until they can be netted against passive income on future tax year. In above case there is no passive income hence it is carried forward.

Suspended passive losses is $3,250 (2000 + 1250)

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