Hugh Has Four Passive Activities That Generate the Following Income

question 59

Essay

Hugh has four passive activities that generate the following income and losses in the current year. $$\begin{array} { c c } \text { Activity } & \text { Gain (Loss) } \\\hline \text { A } & ( \$ 60,000 ) \\\text { B } & ( 20,000 ) \\\text { C } & ( 10,000 ) \\\text { D } & \underline { 10,000 } \\\text { Total } & \underline { ( \$ 80,000 ) }\end{array}$$ How much of the $80,000 net passive activity loss can Hugh deduct this year? Calculate the suspended losses (by activity).

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Definitions:

Equilibrium

The point in a market where the quantity demanded by consumers equals the quantity supplied by producers, leading to a stable price.

Surpluses

The quantity of goods that remains when a producer has more goods than it is able to sell at the current price.

Shortages

Occurrences when the demand for a product or service exceeds its supply in a market, often leading to higher prices and unmet consumer needs.

Equilibrium Price

The market price at which the quantity of a good supplied equals the quantity demanded, leading to a stable market situation.