Passive Loss

Filed Under » , ,
Dictionary Says

Definition of 'Passive Loss'

A financial loss within an investment in any trade or business enterprise in which the investor is not a material participant. Passive losses can stem from investments in rental properties or business partnerships. In order to be considered a non-material participant, the investor cannot be continuously and substantially active or involved in the business activity.
Investopedia Says

Investopedia explains 'Passive Loss'

Passive losses can be written off only against passive gains. When losses, which can include a loss from the sale of the passive business or property, exceed the income from passive activities, the rest of the loss can be carried forward to the next tax year, provided there is some passive income to write it off against.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Capital Loss

    The loss ...

  2. Passive Income

    Earnings an ...

  3. Negative Gearing

    Borrowing money ...

  4. Hobby Loss

    A non-deductible ...

  5. Material Participation Test

    A set of ...

  6. Passive Activity Loss Rules

    A set of rules ...

  7. Nonpassive Income And Losses

    Any income or ...

  8. Gross Up

    A practice ...

  9. House Money Effect

    The tendency for ...

  10. In The Penalty Box

    A phrase ...

Articles Of Interest

  1. Vacation Home Or Income-Producing Investment?

    There is an alternative to letting your cottage sit empty all year, but turning a profit won't be easy.

  2. How do I calculate the percentage gains or losses for my portfolio?

  3. Build A Model Portfolio With Style Investing

    This sophisticated approach will add flair to your returns.

  4. How To Develop A Trading Brain

    The fundamental role of trader psychology tends to be underestimated, with too much emphasis placed on the technical side.

  5. This Is Your Brain On Stocks

    Find out how the human mind can hurt investors' portfolios.

  6. Tips For Controlling Investment Losses

    A profit/loss plan helps investors recognize mistakes and invest logically, rather than emotionally.

  7. Investors: Rely On Your Gut

    Find out how your personality and natural instincts can direct your investment choices.

  8. Removing The Barriers To Successful Investing

    Learn how to stop using emotion and bad habits to make your stock picks.

  9. Investors Intelligence Sentiment Index

    This indicator can give a overall sense of bull and bear forces - learn what it is and how it's constructed.

  10. Trade On Support For The Best Exit Strategy

    Find your sound exit strategy based on support and resistance levels, while understanding the psychology behind them.
Sponsored links

comments powered by Disqus
Hot Definitions

  1. Love Money

  2. Shark Watcher

  3. Judo Business Strategy

  4. Dogs Of The Dow

  5. Chinese Hedge

  6. X-Mark Signature

Recommended
Loading, please wait...
See More »
Trading Center