Leon sells his interest in a passive activity for $230,500. Determine the tax effect of the sale based on each of the following independent facts:

a.Adjusted basis in this investment is $80,675. Losses from prior years that were not deductible due to the passive activity loss restrictions total $88,743.

What is the taxable gain or deductible loss?

How much is the suspended losses at the end of the year?

b.Assume the same sales price but the adjusted basis in this investment is $172,875. Losses from prior years that were not deductible due to the passive activity loss restrictions total $88,743.

What is the taxable gain or deductible loss?

How much is the suspended losses at the end of the year?

c.Assume the same sales price but the adjusted basis in this investment is $172,875. Losses from prior years that were not deductible due to the passive activity loss restrictions total $88,743. In addition, suspended credits total $23,050.

What is the taxable gain or deductible loss?

How much is the suspended losses at the end of the year?

Are the suspended credits at the end of the year carried back. carried forward, or lost.