March 21, 2022

On today’s episode of the LearnLikeaCPA podcast, we talked about another way to save BIG money on taxes as an investor.

There’s essentially two different types of income — active and passive.

Active income comes from your W-2 job or your business that you play an active role in running.

Passive income comes from stocks, rental properties, or any other activity in which you don’t play an active, day-to-day role.

This distinction is important to recognize, because you can’t offset your active income with losses from your passive activity. What you CAN do is offset your passive activity gain with your passive activity loss. And as the icing on the cake, you can carry forward your extra passive activity loss to next year.

If you want to learn more about this powerful tax savings tool, be sure to check out today’s episode!