Ask an AI Accountant

A free tool by

If I am married and I have ordinary income, can my spouse help turn my passive losses into active losses to offset my ordinary income?
AI accountant’s answer:
Unfortunately, your spouse cannot turn your passive losses into active losses just because they are married to you. Passive losses can only offset passive income, and cannot directly offset ordinary income like wages or salary. However, if your spouse has passive income from a separate activity, your combined passive losses and income on a joint tax return can offset each other. Keep in mind that there are specific rules for determining whether an income or loss from an activity is active or passive, and your level of participation plays a significant role. If you or your spouse have material participation in an activity, the losses from that activity may be considered active and can offset ordinary income. However, this will depend on your individual involvement in the activity and whether or not it meets the IRS's material participation requirements.
Comment from reviewer
Judah Broussard, EA, JD
Not Correct.
Icon check
Looks good

Keeper’s AI Accountant

This AI accountant is powered by GPT-4, but has up-to-date knowledge of tax law. It’s been trained on federal and state tax updates for 2023. With credentialed tax professionals fact-checking its responses, it applies IRS rules to real-world situations.

Estimate tax saving

Track and claim every eligible deduction with Keeper

Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.