Eric makes an installment sale of a passive activity having suspended losses of $40,000.He collects 25% of the sales price in the current year, and will collect 25% in each of the next three years.Eric can deduct $10,000 of the passive loss this year.

Question

Quizplus · Accepted Answer

Since Eric made an installment sale of a passive activity with suspended losses of $40,000 and can deduct $10,000 of the passive loss this year, it is true that he collected 25% of the sales price in the current year, and will collect 25% in each of the next three years. Therefore, option A is correct.

Eric Makes an Installment Sale of a Passive Activity Having