Active LLC Member losses and taxation

[jmetivier]

I am an active member of an LLC with an ownership over 10%
As founder my capital account is zero
If the LLC generates losses, can I use this losses against my income as ACTIVE Member?

thanks

[BLL]

How is the LLC taxed? Use your personal 1040 if it's a disregarded entity and losses offset other income. S-corp and partnerships have pass through taxation and losses offset other income. C-corp files its own tax return and there is no offset.

[mcwagner]

also depends on what kind of income the LLC has.

rental income generally remains passive upon passthrough to the members, but other passive income *may* become active if the member is providing personal services to the company (active management).

passive/active changes how the income is taxed, loss limits, etc.

It's not a "yes or no" question.