Apologies in advance for the brevity of this diary (which, in DKOS 2 days I would've tagged w/ "not a dairy" due to its lack of length).
Mittens released his 2011 tax returns today, and I was somewhat surprised to see that the Rob Rom Enterprises passive losses (aka Rafalca the dancing horse) from 2010 that were suspended and carried forward to 2011 were nowhere to be found.
Man up, Mittens, and take your deductions, even - no, especially - the ones from questionable activities.
At any rate, in 2010 Rafalca the Dancing Horse was claimed on the Romneys' Schedule E; there was a (roughly) $77,000 loss that, because they didn't have enough passive income, they couldn't deduct in 2010 and, accordingly, was "suspended" and carried over to 2011. Lo and behold, in 2011 they had about $1.3 million in passive gains, and could've deducted their $77K in horse expenses. Instead of taking the loss, though, they just omitted the loss, probably assuming that the political embarrassment isn't worth the $30K or so in tax savings they'd get from it.