If a Taxpayer Sells a Passive Activity with Suspended Passive

question 51

Multiple Choice

If a taxpayer sells a passive activity with suspended passive activity losses from prior years, what type of income can be offset by the suspended passive losses in the year of sale?

• A) Passive activity income
• B) Portfolio income
• C) Active business income
• D) Any of these types of income can be offset.
• E) None of these. The suspended losses disappear when the passive activity is sold.

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Definitions:

Basilar Membranes

A structure in the cochlea of the inner ear that vibrates in response to sound, playing a key role in the sensory coding of auditory signals.

Tectorial Membranes

A structure in the cochlea of the inner ear that is involved in the auditory sensing process, by interacting with hair cells to facilitate hearing.

Hair Cells

Sensory receptors for hearing that are attached to the basilar membrane in the cochlea.

Organs of Corti

Located within the cochlea of the inner ear, they are essential for converting sound vibrations into neural signals for hearing.