What is the tax treatment of net losses in excess of the at-risk amount for an activity?
a) Any losses in excess of the at-risk amount are carried back 2 years against activities with income and then carried forward for 20 years.
b) Any losses in excess of the at-risk amount are deducted currently against income from other activities; the remaining loss, if any, is carried forward without expiration.
c) Any loss in excess of the at-risk amount is suspended and is deductible in the year in which the activity is disposed of in full.
d) Any losses in excess of the at-risk amount are suspended and carried forward without expiration and are deductible against income in future years from that activity.
Ans: d) Any losses in excess of the at-risk amount are suspended and carried forward without expiration and are deductible against income in future years from that activity.
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