No. Passive losses are only offset by passive income, not income from stocks, bonds, interest and dividends. There are limited partnerships that might pass passive income through a K-1.
According to the IRS:
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Passive: Rentals and businesses without material participation. A limited partner is generally passive due to more restrictive tests for material participation. As a result, limited partners will generally have passive income or losses from the partnership
Income and losses from the following activities would generally be passive:
- Equipment leasing
- Rental real estate (with some exceptions)
- Sole proprietorship or farm in which the taxpayer does not materially participate
- Limited partnerships with some exceptions
- Partnerships, S-Corporations, and limited liability companies in which the taxpayer does not materially participate
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Nonpassive: Businesses in which the taxpayer materially participates. Also, salaries, guaranteed payments, 1099 commission income and portfolio or investment income are deemed to be nonpassive. Portfolio income includes interest income, dividends, royalties, gains and losses on stocks, pensions, lottery winnings, and any other property held for investment
Income and losses from the following activities would generally be nonpassive:
- Salaries, wages, and 1099 commission income
- Guaranteed payments
- Interest and dividends
- Stocks and bonds
- Sale of undeveloped land or other investment property
- Royalties derived in the ordinary course of business
- Sole proprietorship or farm in which the taxpayer materially participates
- Partnerships, S-Corporations, and limited liability companies in which the taxpayer materially participates
- Trusts in which the fiduciary materially participates
If you have additional questions or details regarding this, please feel free to post in the comments for further clarification.
