Jeff owned one passive activity. Jeff sold the activity and realized a $2,000 gain on the sale. Prior to the sale, he realized a current year loss from the activity of $6,000. In addition, he has suspended losses from prior years of $7,000. What is the net impact on Jeff's AGI this year due to the passive activity?

Question

Quizplus · Accepted Answer

The net impact on Jeff's AGI this year due to the passive activity is a decrease of $11,000. This is because the $2,000 gain on the sale of the activity is offset by the $6,000 current year loss and the $7,000 suspended losses from prior years.

Jeff Owned One Passive Activity