1. Dan is involved in three business activities. He does not materially participate in any activity....

Transcribed Image Text:

1. Dan is involved in three business activities. He does not materially participate in any activity. He has at-risk amounts in excess of $250,000 for each. During the year, the activities produced the following income (losses) Activity A: Activity B: Activity C: ($50,000) ($150,000) $100,000 Net passive activity loss: $150000 Assume Dan sells Activity B for a $80,000 gain in the current year. In addition, Dan had $20,000 passive activity carried loss carryforwards with respect to Activity B. Assume Dan had no other carryforwards. What amount of passive losses are suspended with respect to each activity, and how will the sale of Activity B impact Dan's income in the current year? 1. Dan is involved in three business activities. He does not materially participate in any activity. He has at-risk amounts in excess of $250,000 for each. During the year, the activities produced the following income (losses) Activity A: Activity B: Activity C: ($50,000) ($150,000) $100,000 Net passive activity loss: $150000 Assume Dan sells Activity B for a $80,000 gain in the current year. In addition, Dan had $20,000 passive activity carried loss carryforwards with respect to Activity B. Assume Dan had no other carryforwards. What amount of passive losses are suspended with respect to each activity, and how will the sale of Activity B impact Dan's income in the current year?

Answer rating: 100% (QA)

To determine the amount of passive losses suspended with respect to each activity we need to calcula... View the full answer