Caroyl Made a Gift to Tim of a Passive Activity

question 60

Multiple Choice

Caroyl made a gift to Tim of a passive activity (adjusted basis of $50,000, suspended losses of $20,000, and a fair market value of $80,000) . No gift tax resulted from the transfer.

• A) Tim's adjusted basis is $80,000, and Tim can deduct the $20,000 of suspended losses in the future.
• B) Tim's adjusted basis is $80,000.
• C) Tim's adjusted basis is $50,000, and the suspended losses are lost.
• D) Tim's adjusted basis is $50,000, and Tim can deduct the $20,000 of suspended losses in the future.
• E) None of the above.

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Definitions:

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for his concepts of archetypes and the collective unconscious.

Psychodynamic Theorist

An individual specializing in psychodynamics, focusing on conscious and unconscious processes as they influence human behavior.

Life Events

Significant occurrences in a person's life which can have a strong impact on the individual's mental and emotional state.

Dreamer

An individual prone to conceptual or fantastical thinking, often with a vivid imagination that transcends the common realities of life.