Former passive activities (1120)

Alerts and notices

A former passive activity is any activity that was a passive activity in a prior tax year, but is not a passive activity in the current tax year. UltraTax CS treats an activity as a former passive activity if you enter prior-year carryovers and a passive code of 3 (no limitation). UltraTax CS reports income and losses from former passive activities as follows:

  • If the current-year net income is less than the prior-year suspended losses, both prior-year suspended losses and current-year net income are reported on Form 8810.
  • If the current-year net income is equal to or greater than the prior-year suspended losses, neither amount is reported on Form 8810.
  • If there is a current-year net loss, only the prior-year suspended losses are reported on Form 8810.

Related topic: Passive activities overview