Alex has three passive activities with at-risk amounts in excess of $100,000 for each.During the year,the activities produced the following income (losses). Alex's suspended losses are as follows:

Question

Alex has three passive activities with at-risk amounts in excess of $100,000 for each.During the year,the activities produced the following income (losses).  Alex's suspended losses are as follows:

Quizplus · Accepted Answer

The suspended losses for each activity are determined by comparing the at-risk amount to the income (loss) generated by the activity. Activity A had an at-risk amount in excess of $100,000, and generated a loss of $56,250, resulting in suspended losses of $56,250. Activity B also had an at-risk amount in excess of $100,000, but generated a smaller loss of $18,750, resulting in suspended losses of $18,750. Activity C had an at-risk amount in excess of $100,000 and generated a profit, so there are no suspended losses for this activity. Therefore, the correct allocation of suspended losses is $56,250 to A, $18,750 to B, and $0 to C, which is option C.

Alex Has Three Passive Activities with At-Risk Amounts in Excess