Definitions for "passive loss"
When passive income is negative.
Loss from activities in which a taxpayer does not materially participate, such as limited partnerships. Losses from passive activities are deductible only against income from passive activities. Payment in Kind Bonds: Type of bond that allows the issuer to pay the investor the adequate interest and dividends in additional bonds rather than in cash.
Loss incurred from a passive activity. Passive loss rules limit the amount of passive loss that can be deducted to the total of a person's other income from passive activities.