Nell sells a passive activity with an adjusted basis of $45,000 for $105,000.Suspended losses attributable to this property total $45,000.The total gain and the taxable gain are:
A)$60,000 total gain; $105,000 taxable gain.
B)$10,000 total gain; $15,000 taxable gain.
C)$60,000 total gain; $0 taxable gain.
D)$60,000 total gain; $15,000 taxable gain.
E)None of these.

Question

Quizplus · Accepted Answer

The total gain is the sales price of $105,000 minus the adjusted basis of $45,000, which equals $60,000. However, only $15,000 of the gain is taxable because the remaining $45,000 is used to offset the suspended losses.

Nell Sells a Passive Activity with an Adjusted Basis of $45,000