when money is lent to a partnership or an s corporation acting as a pass through entity essentially a business designed to reduce the effects of double taxation by the corporation s owner the interest income on that can qualify as passive income 7
can i use the losses from one passive income source to offset profits from another yes losses from one passive activity can generally be used to offset income from other passive activities for example if you incur a loss from a rental property that loss can usually be used to offset passive income from a limited partnership however there are rules and limitations such as passive activity loss limitations so it s important to consult with a tax professional for specific advice on your situation 