Enrolled Agent Exam [Part 1] 75, Passive Activity Loss Carryovers

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: • Suspended passive losses are not permanently lost; they are carried forward indefinitely to future tax years. • Carryover losses are first used to offset passive income from any source before being applied to nonpassive income. • A complete, taxable disposition of a passive activity unlocks all suspended losses associated with that specific activity. • Upon death, suspended losses are deductible on the final return, but reduced by the step-up in basis. • When a passive activity is gifted, the suspended losses are added to the recipient's basis and are not deductible by the donor. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or Youtube Channel: https://www.youtube.com/@Open-exam-prep