If a Taxpayer Sells a Passive Activity with Suspended Passive

question 68

Multiple Choice

If a taxpayer sells a passive activity with suspended passive activity losses from prior years, what type of income can generally be offset by the suspended passive losses in the year of sale?

• A)Passive activity income
• B)Portfolio income
• C)Active business income
• D)Any of these types of income can be offset
• E)None of the choices are correct. The suspended losses disappear when the passive activity is sold.

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