If you have a nonpassive loss in 2015, then this loss is being used in your 2015 tax return. One of two things happen:
- This nonpassive loss was utilized and offset other nonpassive income and you then paid tax on the "net"
- This nonpassive loss exceeded other nonpassive income and you probably generated a net operating loss.
The general rule on net operating losses is you carry these back 2 years and then forward 20. You can elect to waive the carryback period, however, this is done by attaching an election to your return.
See the attached IRS commentary on this topic:
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
