Jeremy owns a passive activity that has a basis of $30,000 and a suspended loss of $16,000. His taxable income from active and portfolio income is $81,000. What is the effect on Jeremy's taxable income if he sells the passive activity for a. $37,000: Jeremy has a capital gain of $ This results in a net deduction of $ b. $25,000: Jeremy has a s loss. on the sale of the activity and a deduction of $16,000 for the suspended loss on the activity. capital loss on the sale of the passive activity and is allowed a deduction for the $16,000 suspended
Jeremy owns a passive activity that has a basis of $30,000 and a suspended loss of $16,000. His taxable income from active and portfolio income is $81,000. What is the effect on Jeremy's taxable income if he sells the passive activity for a. $37,000: Jeremy has a capital gain of $ This results in a net deduction of $ b. $25,000: Jeremy has a s loss. on the sale of the activity and a deduction of $16,000 for the suspended loss on the activity. capital loss on the sale of the passive activity and is allowed a deduction for the $16,000 suspended
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 38P
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Transcribed Image Text:Jeremy owns a passive activity that has a basis of $30,000 and a suspended loss of $16,000. His taxable income from active and portfolio income is
$81,000.
What is the effect on Jeremy's taxable income if he sells the passive activity for
a. $37,000: Jeremy has a capital gain of $
This results in a net deduction of $
b. $25,000: Jeremy has a s
loss.
on the sale of the activity and a deduction of $16,000 for the suspended loss on the activity.
capital loss on the sale of the passive activity and is
allowed a deduction for the $16,000 suspended
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