Q1.- For what period of time may unallowed losses be carried forward?

A.- Indefinitely.

B.- 15 years.

C.- Ten years.

D.- Five years.

Q2.- What are prior-year disallowed losses?

A.- The excess of the disallowed losses from the activity over the current net income from the activity.

B.- The previous year's disallowed losses from the activity plus the net loss from the activity.

C.- The excess of the net income from the activity over the net disallowed losses from the activity.

D.- Losses from an activity that were disallowed under the Passive Activity Loss (PAL) limitations in a prior year and carried forward to a current tax year.