All glossary terms
Glossary term
Passive Activity Loss (PAL)
A loss from a passive activity that may only offset passive income.
Related terms
2
Jurisdictions
us
Definition
Section 469 limits passive activity loss deductions to passive activity income. Rental activities are generally passive by default. Disallowed losses carry forward indefinitely and are released on complete disposition of the activity.
Examples
- A rental real estate loss can offset rental income but generally not wage income.
Related terms
Translations
ESpérdida de actividad pasiva
ZH被动活动损失
DEVerluste aus passiver Tätigkeit
FRpertes d'activité passive
JA受動的活動損失
Citations
26 U.S.C. · 469
Related citations
Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
- TermNet Investment Income Tax (NIIT)
- TermHobby Loss
- StatuteIRC §469
Cited by
Primary sources
- IRS Publication 925Verified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.