Question
please help!!! THANKS SO MUCH. 24. Nell earns $50,000 salary income in the current year. In addition, Nell sells a passive activity with an adjusted
please help!!! THANKS SO MUCH.
24. Nell earns $50,000 salary income in the current year. In addition, Nell sells a passive activity with an adjusted basis of
$45,000 for $155,000 in the current year. Suspended losses attributable to this property total $45,000. Nell owns
another separate passive activity which has $10,000 passive loss for the current year and $80,000 suspended passive
losses from prior years. Nell will report the following on her current year income tax return (as a result of just these
transactions):
a. $$50,000 salary income and an additional $110,000 from the sale of the passive activity
b. $25,000 salary income and $0 additional taxable income (because all $110,000 gain from the sale of the passive
activity offset by losses and an additional $25,000 of passive loss is available to deduct against the salary
income.
c. $50,000 salary income and $0 additional taxable income (because all $110,000 gain from the sale of the passive
activity is offset by losses).
d. $50,000 salary income and an additional $65,000 gain from the sale of the passive activity.
e. None of a-d is correct
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