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When a Taxpayer Disposes of a Passive Activity by Gift

question 24

Essay

When a taxpayer disposes of a passive activity by gift, what happens to any unused passive activity losses?


Definitions:

Cash Short And Over

An account that records discrepancies between actual cash received and the expected amount, either indicating missing funds (short) or excess funds (over).

Journal Entry

A journal entry is a record of a financial transaction in the accounting books, indicating the accounts and amounts to be debited and credited.

Outstanding Checks

Checks that have been written and recorded in the account ledger but not yet cleared or cashed by the bank.

EFT Deposit

An electronic funds transfer deposit, which represents the digital transfer of money into a bank account.

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