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When a taxpayer experiences a net loss from a nonresidence (rental property):
a. the taxpayer will not be allowed to deduct the loss under any circumstance if the taxpayer does not have passive income from other sources.
b. the loss is fully deductible against the taxpayer's ordinary income no matter the circumstances.
c. if the taxpayer is not an active participant in the rental, the taxpayer may be allowed to deduct the loss even if the taxpayer does not have any sources of passive income.
d. if the taxpayer is not allowed to deduct the loss due to the passive activity loss limitations, the loss is suspended and carried forward until the taxpayer generates passive income or until the taxpayer sells the property.
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When a taxpayer experiences a net loss from a nonresidence (rental property):
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