Susan dies owning a passive activity with a basis of $75,000,a fair market value of $140,000,and suspended losses of $80,000.A $15,000 passive loss can be deducted on Susan's final income tax return.

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The $15,000 passive loss can be deducted on Susan's final income tax return, reducing the suspended losses to $65,000. The basis of the passive activity does not affect the deductibility of the loss. The fair market value of the passive activity becomes relevant only if the activity is sold or transferred.

Susan Dies Owning a Passive Activity with a Basis of $75,000,a