If a taxpayer sells a passive activity with suspended passive activity losses from prior years, what type of income can be offset by the suspended passive losses in the year of sale?
A) Active business income.
B) Portfolio income.
C) Passive activity income.
D) Any of these types of income can be offset.
E) None of the choices are correct. The suspended losses disappear when the passive activity is sold.

Question

Quizplus · Accepted Answer

In the year of sale, suspended passive activity losses can offset any type of income, including active, portfolio, and passive income.

If a Taxpayer Sells a Passive Activity with Suspended Passive