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 a What is the effect on Jeremys taxable income if he sells the passive activity for $37,000 b What is the effect on Jeremys taxable income if he ...

a Any suspended loss on a passive activity is deductible in full when the entire interest in the act ...

Jeremy owns a passive activity that has a basis of $30,000 and a suspended loss of $16,000.

Question:

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 income is $81,000.
a. What is the effect on Jeremy’s taxable income if he sells the passive activity for $37,000?
b. What is the effect on Jeremy’s taxable income if he sells the passive activity for $25,000?

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...