Kelly, who earns a yearly salary of $120,000, sold an activity with a suspended passive activity loss of $44,000.The activity was sold at a loss and Kelly has no other passive activities.The suspended loss is not deductible.

Question

Quizplus · Accepted Answer

Since Kelly sold the activity at a loss and has no other passive activities, the suspended passive activity loss of $44,000 becomes fully deductible in the year of sale.

Kelly, Who Earns a Yearly Salary of $120,000, Sold an Activity