Kate Dies Owning a Passive Activity with an Adjusted Basis

question 62

Multiple Choice

Kate dies owning a passive activity with an adjusted basis of $100,000.Its fair market value at that date is $130,000.Suspended losses relating to the property were $45,000.

• A)The heir's adjusted basis is $130,000,and Kate's final deduction is $15,000.
• B)The heir's adjusted basis is $130,000,and Kate's final deduction is $45,000.
• C)The heir's adjusted basis is $100,000,and Kate's final deduction is $45,000.
• D)The heir's adjusted basis is $175,000,and Kate has no final deduction.
• E)None of these.

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