I have been a minority owner of an Ohio LLC. The franchise closed in 2009 but the LLC just dissolved December of 2014.

I haven't been able to deduct losses from my W2 wages as I haven't been actively doing anything with the LLC and am a minority owner.

I had been told that once the LLC dissolved I would be able to claim the losses against active income/W2 wages. In researching this I can't seem to confirm that this is allowable.

Any comments?

1 Answer 1


You're talking about passive loss carryover. Yes, you can deduct them once the entity which generated them is dissolved. If your K-1 is marked final (one of the two check-boxes on the top of the form) - you can apply the losses to any income. See the IRS Publication 925 for details.

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