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Passive vs NonPassive Losses: What is a lender to do?

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Desi's question:

Can passive &/or non-passive losses on the 1040 tax return be added back to borrower/guarantor cash flow for global analysis? I am having trouble finding a definitive answer to this question.

Linda says:

There is a reason you are not finding an answer to your question. It is not whether something is passive or non passive that determines if it can be added back to cashflow. It is whether it represents significant, continuing source of (or depletion of) cashflow.

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