Josh Has Investments in Two Passive Activities

question 32

Multiple Choice

Josh has investments in two passive activities. Activity A (acquired three years ago) produces income of $30,000 this year, while Activity B (acquired two years ago) produces a loss of $50,000. What is the amount of Josh's suspended loss for the year?

• A) $0
• B) $18,000
• C) $20,000
• D) $50,000
• E) None of the above

---

Definitions:

Sales Forecast

An estimation of the future sales performance of a company or product within a particular timeframe, based on past sales data, market analysis, and economic trends.

Finished Goods Inventory

This refers to the items in a manufacturer's inventory that are completed and ready for sale.

Production Units

Refers to the quantifiable outputs or goods produced by a manufacturing process or facility.

Master Budget

The master budget is a comprehensive financial planning document that consolidates all of a company's individual budgets, outlining its financial goals and plans.