Brent Is Single and Owns a Passive Activity That Has

question 90

Essay

Brent is single and owns a passive activity that has a basis of $25,000 and a suspended passive loss of $8,000. He acquired the passive activity in 2010. Brent's taxable income from active and portfolio income is $85,000, and he has no other capital gains or losses for the year.
a.What is the effect on Brent's taxable income if he sells the passive activity for $42,000?
b.What is the effect on Brent's taxable income if he sells the passive activity for $13,000?
c.What is the effect on Brent's taxable income if he dies this year while the fair market value of the passive activity is $30,000?
d.What is the effect on Brent's taxable income if he dies this year while the fair market value of the passive activity is $18,000?
e.What is the effect on Brent's taxable income if he gives the passive activity to his brother Norm when the fair market value of the passive activity is $30,000?

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Definitions:

Cadherins

A class of type-1 transmembrane proteins that play important roles in cell adhesion, ensuring cells within tissues are bound together, pivotal in maintaining the structure and function of tissues in multicellular organisms.

Marker Molecules

Biological molecules used to identify or track cells, organs, or other biological substances.

Receptor Proteins

Receptor proteins are molecules on the cell surface or within cells that bind to specific substances and initiate cellular responses.

Peripheral Proteins

Proteins located on the outer surface of the lipid bilayer, involved in a variety of processes including cell signaling.