How much suspended loss does Jean Michele have after her transactions with Jaxson, Inc.?

To determine the amount of suspended loss that Jean Michele has after her transactions with Jaxson, Inc., it is necessary to consider how suspended losses operate under the IRS rules. Suspended losses occur when a taxpayer is unable to deduct losses against other income in a given tax year due to passive activity loss limitations.

Passive activity losses can only offset passive income. If there are no passive income sources to offset these losses, as is often the case when the taxpayer does not participate materially in the business activity generating the loss, the loss is suspended. It can be carried forward to future tax years and used to offset passive income in those years or when the activity is disposed of.

In this scenario, if Jean Michele had transactions with Jaxson, Inc. that did not generate any passive income, or if she did not materially participate in the operation of Jaxson, Inc., any losses incurred would indeed be considered suspended.

Given that the answer indicates a suspended loss amount of $0, it suggests that either Jean did not incur any losses from her involvement with Jaxson, Inc., or the losses were fully absorbed or offset in the current tax year by passive income. Therefore, the determination of $0 as the amount of suspended loss reflects either