Chapter 8 Losses and bad debts
Chapter 8 Losses and Bad Debts
Learning Objectives Identify transactions that may result in losses Determine the proper classification for losses Calculate the suspended loss from passive activities Identify what constitutes a passive activity loss
Learning Objectives • Identify transactions that may result in losses • Determine the proper classification for losses • Calculate the suspended loss from passive activities • Identify what constitutes a passive activity loss
Learning Objectives Determine when a taxpayer has materially participated in a passive activity Identify and calculate the deduction for a casualty or theft loss Compute the deduction for a bad debt Compute a net operating loss deduction
Learning Objectives • Determine when a taxpayer has materially participated in a passive activity • Identify and calculate the deduction for a casualty or theft loss • Compute the deduction for a bad debt • Compute a net operating loss deduction
Transactions That May Result in losses Sale or exchange of property Expropriation, seizure, or confiscation of property Abandonment of property Worthless securities Demolition of property
Transactions That May Result In Losses • Sale or exchange of property • Expropriation, seizure, or confiscation of property • Abandonment of property • Worthless securities • Demolition of property
Classifying The Loss On A Taxpayer’ S Return departmen Ordinary VS Capital loss Disallowance possibilities
Classifying The Loss On A Taxpayer’s Return • Ordinary vs. Capital loss • Disallowance possibilities