First and foremost, both of these terms are tax terms of art. Passive losses are "hobby losses," losses that are not derived from the main business activity. These losses are sometimes deductible. In contrast, the "at risk rules" is basically an understanding used in partnership, which states that you cannot allocated losses to someone not at risk for those losses; thus, you must allocated loss by the amount of risk, which is usually also demonstrated by gain allocation. E.g. A partnership has three partners, A, B, and C. A and B each put in 49% of the income, C puts in 2%. That year the partnership has 100 dollars in losses. The partnership cannot allocate 100% of the losses to C, because he was not "at risk" of losing that much. These rules were enacted to do away with tax shelters that throw out losses to investors.
Risk is a situation which involves possible exposure to danger, injury, loss, or any other negative occurrence. Passive risk requires no action beyond documenting a decision.
Many things...type of loss (passive or not), at risk rules, age of investment, source of investment, active participation, I think S 179 expensing comes in there too, etc.
False.
Risk retention is when a company decides to bear the financial impact of a potential loss itself, while risk transfer involves shifting the risk to another party through insurance or other financial arrangements. Risk retention allows a company to potentially save on insurance premiums but also exposes it to higher financial losses, while risk transfer helps mitigate potential losses by passing them onto another party.
It will lead to a high probability of risk in failure,damage,loss of assets or life.
pure risk is the a situation in which there is a possibility of loss or no loss while speculative risk thereeither profit or loss
Mutual fund do not reduce the risk of loss.
Retaining risk passively - Understanding the risk without taking any actions to prevent possible outcomes. Active retention - preparing for risk to happen, having plan for in case it would happen. Some form of self insurance (direct insurance would be form of transferring risk.)
Risk management is the process of analyzing a person or entity's exposure to risk of loss. The risk of loss can be loss to property (such as by fire), or economic (such as by employee theft of loss of business). After that, it analyzes available mechanisms to deal with or compensate for that risk. Insurance is one of several risk management techniques. Briefly, it involves transferring the risk of loss to a third party (the insurer). In return, the party transferring the risk (the insured) pays a sum of money (the premium) to the insurer as compensation for accepting the risk of loss.
Risk acceptance in composite risk management is a determination of what is an acceptable risk. One needs to determine what loss is acceptable and what loss is probable to determine if the loss is an acceptable risk.
passive smokers
Risk is an uncontrolled exposure to loss.