Passive Loss Limitations 2025. If the ventures are passive activities, the passive activity loss rules prevent you from deducting expenses that are generated by them in excess of their income. Losses generated by passive activities (passive activity losses, or pals) are allowed only to the extent of income generated by passive activities (passive income).
The $150,000 income threshold for deducting passive real estate losses has not been adjusted for inflation since 1986. In general, passive losses can only offset passive income , preventing.