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

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Definitions:

Mass

Mass is a property of physical objects that quantifies the amount of matter within them, offering resistance to acceleration when a force is applied.

Mercury (II) Oxide

A red or orange solid compound that is formed by the oxidation of mercury, used in the production of mercury as it decomposes to mercury and oxygen when heated.

Sealed System

A closed environment where no matter is allowed to enter or leave, typically used in reference to thermodynamic systems.

Carbonic Acid

A weak acid formed in solution when carbon dioxide dissolves in water, playing a vital role in the carbonation of soft drinks, the respiratory gas exchange, and the acid-base balance in the body.