Samantha sells a passive activity (adjusted basis of $50,000) for $90,000.Suspended losses attributable to this property total $30,000.The realized gain and the taxable gain are:

Question

Quizplus · Accepted Answer

Realized gain is calculated as the selling price ($90,000) minus the adjusted basis ($50,000), which equals $40,000.

The taxable gain is calculated as the realized gain ($40,000) minus the suspended losses attributable to the property ($30,000), which equals $10,000.

Therefore, the correct answer is D) $40,000 realized gain; $10,000 taxable gain.

Samantha Sells a Passive Activity (Adjusted Basis of $50,000) for $90,000.Suspended