Nell Sells a Passive Activity with an Adjusted Basis of $45,000

question 76

Multiple Choice

Nell sells a passive activity with an adjusted basis of $45,000 for $105,000. Suspended losses attributable to this property total $45,000. The total gain and the taxable gain are:

• A) $60,000 total gain? $105,000 taxable gain.
• B) $10,000 total gain? $15,000 taxable gain.
• C) $60,000 total gain? $0 taxable gain.
• D) $60,000 total gain? $15,000 taxable gain.
• E) None of the above.

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Definitions:

Tympanic Membrane

A thin, cone-shaped membrane that separates the external ear from the middle ear and vibrates in response to sound waves.

External Acoustic Meatus

The external passage leading into the ear, facilitating the travel of sound waves from the outside to the eardrum.

Tympanic Cavity

The air-filled space in the middle ear that contains the auditory ossicles, important for sound transmission.

Auricle

The external, visible part of the ear that captures sound waves and directs them into the ear canal; also known as the pinna.