Question

Theta Corporation, a closely held corporation (not a PSC), had $120,000 of active income, $110,000 of portfolio income, and a $240,000 passive loss during the year. How much of the passive loss is deductible

Answer 1

Answer:

$120,000

Explanation:

Calculation to determine How much of the passive loss is deductible

Using this formula

Deductible passive loss=Passive loss-Active income

Let plug in the formula

Deductible passive loss=$240,000-$120,000

Deductible passive loss=$120,000

Therefore How much of the passive loss is deductible is $120,000