Samantha Invested $75,000 in a Passive Activity Several Years Ago,and

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The Answer is If losses were limited only by the at-risk rules,Samantha would be able to deduct the following amounts in 2009 and 2010.

If losses were limited only by the at-risk rules,Samantha would be able to deduct the following amounts in 2009 and 2010. *Allowed under the at-risk rules,then reclassified as passive losses and subject to the passive loss limitations. However,the losses are limited by the passive loss rules as follows: In 2011,the $25,000 income increases Samantha's at-risk amount to $25,000 so she is now allowed to deduct the $20,000 of disallowed losses.The $25,000 is passive income,which can be offset by $25,000 of suspended losses,leaving a suspended loss of $10,000.At the end of 2011,Samantha has no unused losses under the at-risk rules,$10,000 of suspended passive losses,and a $5,000 at-risk amount ($15,000 at-risk amount on 1/1/09 - $15,000 loss in 2009 - $0 loss in 2010 + $25,000 income in 2011 - $20,000 reclassified passive loss in 2011).

*Allowed under the at-risk rules,then reclassified as passive losses and subject to the passive loss limitations.
However,the losses are limited by the passive loss rules as follows:

In 2011,the $25,000 income increases Samantha's at-risk amount to $25,000 so she is now allowed to deduct the $20,000 of disallowed losses.The $25,000 is passive income,which can be offset by $25,000 of suspended losses,leaving a suspended loss of $10,000.At the end of 2011,Samantha has no unused losses under the at-risk rules,$10,000 of suspended passive losses,and a $5,000 at-risk amount ($15,000 at-risk amount on 1/1/09 - $15,000 loss in 2009 - $0 loss in 2010 + $25,000 income in 2011 - $20,000 reclassified passive loss in 2011).

Samantha Invested $75,000 in a Passive Activity Several Years Ago,and

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