Real Estate Glossary | What is Passive Loss??

Q: What is Passive Loss?

Passive Loss - Passive loss refers to a loss that occurs from an investment or activity that is not considered to be an active trade or business. Passive losses can be from investments such as rental properties, limited partnerships, or other passive activities. These losses can be offset against passive income, but cannot be used to offset active income. This means that passive losses can only be used to offset passive income and not income from active trades or businesses.

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