If a Taxpayer Sells a Passive Activity with Suspended Passive

question 68

Multiple Choice

If a taxpayer sells a passive activity with suspended passive activity losses from prior years, what type of income can generally be offset by the suspended passive losses in the year of sale?

• A)Passive activity income
• B)Portfolio income
• C)Active business income
• D)Any of these types of income can be offset
• E)None of the choices are correct. The suspended losses disappear when the passive activity is sold.

Recognize that a variety of factors, both financial and non-financial, can be considered in evaluating a department's performance.

Identify and allocate joint costs using different bases.

Understand the evaluation criteria for different departments.

Grasp the concepts of direct vs. indirect expenses and controllable vs. uncontrollable costs.

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Definitions:

Commercial Transactions

Business activities or endeavors that involve the exchange of goods, services, or funds between two or more parties.

Implied-In-Fact Contract

A contract formed by the actions or conduct of the parties involved, rather than written or spoken words.

Express

Clearly and explicitly stated or communicated, leaving no room for doubt or ambiguity.

Acts of Parties

Actions or conduct by individuals that have legal significance or implications.