Kim made a gift to Pat of a passive activity with an adjusted basis of $50,000, suspended losses of $20,000, and a fair market value of $60,000. Which of the following statements is true? (I Believe the answer is B ! PLEASE EXPLAIN WHY IN WORDS!!!!)

A. Pats adjusted basis is $60,000

B. Pats adjusted basis is $50,000, and Pat can deduct the $20,000 of suspended losses in the future.

C. Pats adjusted basis is $60,000 and $10,000 of suspended losses are lost

D. Pats adjusted basis is $70,000.

E. None of the above