Jeff Owned One Passive Activity

question 108

Multiple Choice

Jeff owned one passive activity.Jeff sold the activity and realized a $2,000 gain on the sale.Prior to the sale,he realized a current year loss from the activity of $6,000.In addition,he has suspended losses from prior years of $7,000.What is the net impact on Jeff's AGI this year due to the passive activity?

• A)increase of $2,000
• B)no net change
• C)decrease of $4,000
• D)decrease of $11,000

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Definitions:

Regular Basis

Refers to a consistent or scheduled pattern of occurrence or action, happening with predictable frequency.

Jewish

Relating to, associated with, or denoting Jews, a monotheistic, ethnoreligious group originating from the Israelites or Hebrews of ancient Middle East.

Introversion

A personality trait characterized by a preference for solitary activities and inner thoughts over external stimulation and social interaction.

Extraversion

A personality trait characterized by outgoingness, high energy, and enjoyment in social situations.