Mara Owns an Activity with Suspended Passive Losses from Prior

question 279

Multiple Choice

Mara owns an activity with suspended passive losses from prior years of $13,000. In the current year, Mara becomes a material participant in the activity. This year the activity generates $6,000 of income. The net effect of this activity on Mara's current year AGI is

• A) 0.
• B) a decrease of $7,000.
• C) a decrease of $13,000.
• D) an increase of $6,000.

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Definitions:

Human Potential

The inherent ability or capacity for growth, development, and achievement present within each person.

Self-realization

The process of fully understanding and realizing one's own potential, abilities, or character.

Self-determination

The process by which a person controls their own life and makes decisions independently, often linked to motivation and personal growth.

Humanistic Theorists

Scholars and psychologists who contribute to the development and application of humanistic psychology, focusing on individual potential and personal growth.