What if the income and deductions from the PTP come out to a net loss?
A net loss from a PTP is considered a “passive loss” under the tax code. If you come out with a net loss for the tax year, you cannot deduct it from your taxable income. However, you can carry it forward into future tax years and use it to reduce your taxable income from the same PTP. And if any of the loss is left over when you sell your PTP, you can deduct it from your other income in that year.
