Definition of 'Form 6252'
If you have passive activity losses, you can use them to offset your other income, such as wages, interest, and dividends. However, there are limits on how much you can deduct. You can only deduct passive activity losses up to the amount of your passive activity income. Any losses that you cannot deduct are carried forward to future years.
Form 6252 also allows you to claim passive activity credits. These credits can be used to offset your tax liability. However, there are also limits on how much you can claim. You can only claim passive activity credits up to the amount of your tax liability attributable to your passive activities. Any credits that you cannot claim are carried forward to future years.
If you have any questions about Form 6252, you should consult with a tax professional.
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