A suspense account consists of losses that are temporarily or permanently non deductible because the investor has no money at risk.
Investor Andy invests $5000 in an oil well. In 2017, the venture loses $9,000. Since investor Andy only invested $5,000, he has only $5,000 at risk and can only deduct $,5000. The other $4,000 goes into a suspense account. If the well never makes money, the losses are lost forever. If the well makes money in 2018, the investor can take the deduction in 2018 or in any other year in which the well makes money. When we had the extra losses we were in suspense, would we get to deduct them or not? We didn’t know, would the well make money or not?