8.6.1

Problem 11-43 (LO. 3, 9) Sarah has investments in four passive activity partnerships purchased several years ago. Last year the income and losses were as follows: A B Activity Income (Loss) $30,000 (30,000) (15,000) (5,000) In the current year, she sold her interest in Activity D for a $10,000 gain. Activity D, which had been profitable until last year, had a current loss of $1,500. Answer the following questions to determine how the sale of Activity D affects Sarah's taxable income in the current year. C D a. The amount of suspended losses carried forward to the year of the sale is $ b. What amount of the suspended losses is allocated to Activity D? c. How much, if any, of this net gain may be used to absorb passive activity losses from other activities