Given That Losses from Passive Activities Can Only Offset Income

question 93

Essay

Given that losses from passive activities can only offset income from passive activities unless the passive activity is sold, what types of activities are not considered to be passive? Name at least three ways(tests)a taxpayer may be treated as an active participant in an activity.

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Definitions:

Administrative Head

The top official in charge of the administration of an organization, overseeing its operations and ensuring adherence to policies and goals.

Cabinet-level Departments

Departments within the executive branch of the U.S. government led by secretaries who are members of the President's Cabinet, managing vast sections of public policy.

Administrative Law Judge

A judge who presides over hearings and disputes involving government agencies and their regulations.

Full Commission

A payment model where an agent or representative receives the entirety of the commission offered on the completion of a sale or deal without deductions.