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Library/๐Ÿ’ฐ Tax/State & Local Tax (SALT)
Intermediate

Passive Activity Loss (PAL) Limitation Analysis

Determines if losses from rental or business activities can offset other income.

Analyze the {loss_amount} loss from {activity_name}. Determine if it is 'Passive' based on Material Participation tests (e.g., 500-hour rule). Explain if the loss can offset 'Active' or 'Portfolio' income, and calculate the 'Suspended Passive Losses' to be carried forward to next year.

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Book-to-tax reconciliation (M-1/M-3 style) with JE suggestions

Builds a book-to-tax reconciliation and identifies permanent/temporary differences with documentation notes. Useful for tax provision and return preparation.

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Compares book depreciation to tax depreciation, identifies differences, and prepares supporting schedules. Useful for both compliance and provision teams.

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Details

๐Ÿ’ฐ

Category

Tax

State & Local Tax (SALT)

Tested With

โœ“ GPT-4oโœ“ Claude 3.5 Sonnet

Tags

#PAL#Real Estate#Individual Tax

Added

6m ago

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