If a Taxpayer Sells a Passive Activity with Suspended Passive

question 35

Multiple Choice

If a taxpayer sells a passive activity with suspended passive activity losses from prior years, what type of income can 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.

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Definitions:

Strategic Choices

The decisions made by an organization in order to achieve its long-term goals.

Hotel Industry

A sector dedicated to providing lodging services, hospitality, and accommodations to travelers and guests.

Competitive Advantage

An attribute that allows an organization to outperform its competitors.

Underlying Strategies

The foundational plans or approaches that support and drive the main tactics or methods being used.