If a Taxpayer Sells a Passive Activity with Suspended Passive

question 35

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 the choices are correct. The suspended losses disappear when the passive activity is sold.

---

Definitions:

Aquatic Ecosystems

Water-based environments, including oceans, rivers, lakes, and wetlands, where plants and animals interact within a hydrological system.

Limiting Factor

An environmental condition that limits the growth, abundance, or distribution of an organism or a population of organisms in an ecosystem.

Ecological Region

A geographically distinct area with characteristic flora, fauna, and environmental conditions, often defined by natural boundaries.

Specific Species

A specific species is a distinct type of organism identified by unique characteristics separating it from other organisms, often used in the context of conservation, study, or management.