Carol Made a Gift to Tim of a Passive Activity

question 28

Multiple Choice

Carol made a gift to Tim of a passive activity (adjusted basis of $50,000, suspended losses of $20,000, and a fair market value of $80,000) .No gift tax resulted from the transfer.

• A)Tim's adjusted basis is $80,000, and he can deduct the $20,000 of suspended losses in the future.
• B)Tim's adjusted basis is $80,000.
• C)Tim's adjusted basis is $50,000, and the suspended losses are lost.
• D)Tim's adjusted basis is $50,000, and he can deduct the $20,000 of suspended losses in the future.
• E)None of these applies here.

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Definitions:

Legal Limitations

Restrictions or boundaries defined by laws that regulate what individuals or organizations can and cannot do.

Picketing

Involves individuals (usually workers or union members) standing or marching outside a place of employment or location of dispute to protest or draw public attention to a cause, such as labor rights issues.

Strike Law

The legal framework governing the right to strike, detailing when and how workers can legally stop work as a form of protest.

Employee Strikes

A work stoppage initiated by employees who refuse to work as a form of protest against policies, conditions, or practices they find unacceptable.