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.

---

Definitions:

Dynamic IP

Dynamic IP is a type of Internet Protocol address that can change each time a device connects to the internet, as opposed to a static IP, which remains constant.

Applet

A small application designed to run within another application or web page, often requiring minimal resources.

JavaScript

An Internet protocol (IP) addressing scheme that makes IP addresses longer, thereby providing more available addresses.

DOM

Document Object Model; a programming interface for web documents, representing the page so that programs can change the document structure, style, and content.