Loren owns three passive activities that had the following results for the current year:

If none of the passive activities are rental real estate activities,what is the amount of suspended loss attributable to Activity C?

Question

Loren owns three passive activities that had the following results for the current year:
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If none of the passive activities are rental real estate activities,what is the amount of suspended loss attributable to Activity C?

Quizplus · Accepted Answer

The suspended losses from Activities A and B are $0 since they both had net income. To determine the suspended loss from Activity C, we must calculate the total amount of losses incurred ($60,000) and subtract the amount of income generated from that activity ($40,000). This leaves us with a total suspended loss of $20,000 (option C).

Loren Owns Three Passive Activities That Had the Following Results