True & False Y. The basis of an asset must be reduced by the depreciation allowable, 2. Adjusted gross income (AGI) is the basis for a number of phase-outs of deductions. 3. A change to adjusted gross income cannot affect a taxpayer's itemized deductions. 4. Losses from passive activities that cannot be deducted currently are carried over for up to 5 subsequent years. 5. The basis of an asset must be reduced by the depreciation allowable. 6. The destruction of a capital asset due to a casualty will result in recognition of an ordinary loss. 7. Losses on sales of property between a taxpayer and his/her siblings are disallowed. 8. A taxpayer may deduct suspended losses of a passive activity when the taxpayer completely terminates his or her ownership of the activity. 9. The total worthlessness of a security generally results in an ordinary loss. 10. Individuals who actively participate in the management of rental real property may deduct up to $25,000 in losses, subject to AGI limitations