Kate Dies Owning a Passive Activity with an Adjusted Basis

question 99

Multiple Choice

Kate dies owning a passive activity with an adjusted basis of $100,000. Its fair market value at that date is $130,000. Suspended losses relating to the property were $45,000.

• A) The heir's adjusted basis is $130,000, and Kate's final deduction is $15,000.
• B) The heir's adjusted basis is $130,000, and Kate's final deduction is $45,000.
• C) The heir's adjusted basis is $100,000, and Kate's final deduction is $45,000.
• D) The heir's adjusted basis is $175,000, and Kate has no final deduction.
• E) None of the above.

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Definitions:

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