Pat Sells a Passive Activity for $100,000 That Has an Adjusted

question 35

Essay

Pat sells a passive activity for $100,000 that has an adjusted basis of $55,000. During the years of her ownership,
$60,000 of losses have been incurred that were suspended under the passive activity loss rules. In addition, the passive activity generated tax credits of $10,000 that were not utilized and suspended. Determine the tax treatment to Pat on the disposition of the property.

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Definitions:

Social Support Network

A social support network consists of family, friends, and peers who provide emotional, informational, and practical support during times of need.

Older Americans

A demographic term referring to individuals in the United States generally aged 65 years and older.

Institutions

Structures or mechanisms of social order and cooperation governing the behavior of a set of individuals within a given human colony.

Nursing Home

A residential facility for elderly or disabled people who require constant care and medical attention.