Norris Owns a Passive Activity That Has a Suspended Loss

question 70

Multiple Choice

Norris owns a passive activity that has a suspended loss of $12,000. The activity has a fair market value of $42,000 and his adjusted basis in the activity is $27,000.
I.If Norris gifts the property, he is allowed to deduct $3,000 of the suspended loss.
II.If Norris dies, none of the suspended loss is deductible.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Transversus Abdominis

A muscle layer of the abdominal wall which helps with the body's posture and internal organ support.

External Abdominal Oblique

A large, flat muscle lying on the outer surface of the abdomen, which helps in the rotation and lateral bending of the trunk.

Internal Abdominal Oblique

A muscle located within the abdominal wall playing a crucial role in respiratory movements and stabilizing the abdominal region.

Quadratus Lumborum

The Quadratus Lumborum is a deep abdominal muscle that helps with the movement and stabilization of the spine.