Which rule may limit the availability of income tax benefits from a particular investment?

The passive activity loss rule significantly restricts the ability to claim tax benefits from investments that fall under the category of passive activities. Passive activities typically include rental properties and businesses in which the investor does not materially participate. According to the IRS guidelines, losses from these activities can only offset income from passive sources, which means that if an investor has passive losses from an investment but does not have other passive income to offset those losses, they cannot utilize those losses to reduce their taxable income for the year.

This restriction is essential for tax planning as it prevents taxpayers from fully utilizing their investment losses to offset non-passive income, such as wages or active business income. The rule exists to curtail scenarios where investors might claim significant losses from passive activities without any real economic risk associated with those investments.

In contrast, the other options focus on different aspects of taxation and compliance. The tax conduit option deals with how certain entities, like partnerships, pass income and losses through to the owners. The substantial economic effect doctrine relates more to the tax implications of transactions that lack meaningful economic substance. The at-risk rule, while also limiting deductions based on an investor's actual economic risk, does so in a different context and does not specifically target the same passive activity situations that the passive