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

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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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Average Salary

The mean income calculated by dividing the total salary of a group by the number of individuals in that group.

Increased

A term describing something that has become larger or greater in size, amount, or degree.

Decreased

Reduced or lessened in amount, size, strength, or intensity.

Legal Investigations

The process of gathering facts and evidence to ascertain the truth for legal proceedings.

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