Which of the following is the correct order in which loss
limitation rules are applied?
-
Basis rules first, at-risk rules second, passive loss rules
third. -
Passive loss rules first, at-risk rules second, basis rules
third. -
Basis rules first, passive loss rules second, at-risk rules
third. -
Passive loss rules first, basis rules second, at-risk rules
third.
Answer
Solution: Basis rules first, at-risk rules second, passive loss
rules third.
Explanation: The loss limitation rules are applied in the below
given order:
1) Section 704(d) basis limitation rule
2) Section 465 at-risk limitation rule
3) Section 469 passive loss limitation rule
