@AliciaP1 I mean "Handle" in the sense of what to do with the information generated in form 7203. Specifically, what portion, if any, of the 10,000 in allowed loss from stock basis would be suspended by passive activity loss rules in the example I gave? How would it be reported — on schedule E, form 8582, and so on? Please note in the example there is a net of -10,000 loss to schedule E for the current year, even though there is 10,000 ordinary income.
