Nell Sells a Passive Activity with an Adjusted Basis of $45,000

question 76

Multiple Choice

Nell sells a passive activity with an adjusted basis of $45,000 for $105,000. Suspended losses attributable to this property total $45,000. The total gain and the taxable gain are:

• A) $60,000 total gain? $105,000 taxable gain.
• B) $10,000 total gain? $15,000 taxable gain.
• C) $60,000 total gain? $0 taxable gain.
• D) $60,000 total gain? $15,000 taxable gain.
• E) None of the above.

---

Definitions:

Highest Profit

The maximum financial gain that can be achieved from business activities after subtracting all relevant costs and expenses.

Competitive Quantity

Indicates the amount of product or service offered by businesses in a competitive market scenario, aimed at achieving optimum market share.

Natural Monopoly

A market condition where a single firm can supply a good or service to an entire market at a lower cost than two or more firms.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity of output.