Question

Ian Mapp sells an entire passive activity property. The property has an adjusted basis of $60,000...

Ian Mapp sells an entire passive activity property. The property has an adjusted basis of $60,000 and suspended losses of $20,000. The sales price is $75,000. What will the tax consequence be in 2019 when Mapp sells the property?

Homework Answers

Answer #1

Ans;

Sales price : $75,000

Property Basis : $60,000

Suspended Losses : $20,000

Suspended losses are those losses which arises as a result of a passive activity loss after setting of income for that year. Suspended losses can be carried forward for indefinite period and can be deducted from the passive income of next years.

Therefore in the current year on sale of property @$15,000 above than its property basis can be deducted completely from carried forward suspended losses. And balance $5,000 of suspended losses will be carried forward for further years.

So Net income after adjustment : $0

Carry forward of suspended loss : $5,000

For any query please ask in comment box, we are happy to help you. Also please don't forget to provide your valuable feedback. Thanks!

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Marshall sells his entire interest in a passive activity for $350,000 on the installment method. His...
Marshall sells his entire interest in a passive activity for $350,000 on the installment method. His adjusted basis in the property is $280,000. The activity has a suspended loss of $40,000. In your computations, round any division to three decimal places. If Marshall receives a $80,000 down payment, he will recognize a gain of $ and Marshall will deduct $ of the suspended losses in the first year of the sale.
Leon sells his interest in a passive activity for $224,000. Determine the tax effect of the...
Leon sells his interest in a passive activity for $224,000. Determine the tax effect of the sale based on each of the following independent facts: If an amount is zero, enter "0". a. Adjusted basis in this investment is $78,400. Losses from prior years that were not deductible due to the passive activity loss restrictions total $86,240. The (taxable gain/ or Deductible Loss) is $. The suspended losses at the end of the year are $. Feedback When a taxpayer...
Lucy sells her partnership interest, a passive activity, with an adjusted basis of $394,000 for $433,400....
Lucy sells her partnership interest, a passive activity, with an adjusted basis of $394,000 for $433,400. In addition, she has current and suspended losses of $59,100 associated with the partnership and has no other passive activities. Her total gain is $.............. and her deductible loss is $............ Lucy's deductible loss is offset against .........................
Nell earns $50,000 salary income in the current year. In addition, Nell sells a passive activity...
Nell earns $50,000 salary income in the current year. In addition, Nell sells a passive activity with an adjusted basis of $45,000 for $155,000 in the current year. Suspended losses attributable to this property total $45,000. Nell owns another separate passive activity which has $10,000 passive loss for the current year and $80,000 suspended passive losses from prior years. Nell will report the following on her current year income tax return (as a result of just these transactions): a. $$50,000...
Nell earns $50,000 salary income in the current year.  In addition, Nell sells a passive activity with...
Nell earns $50,000 salary income in the current year.  In addition, Nell sells a passive activity with an adjusted basis of $45,000 for $155,000 in the current year. Suspended losses attributable to this property total $45,000. Nell owns another separate passive activity which has $10,000 passive loss for the current year and $80,000 suspended passive losses from prior years.  Nell will report the following on her current year income tax return (as a result of just these transactions): a. $$50,000 salary income...
To date, Josh has had investments in only two passive activities. Activity A (acquired three years...
To date, Josh has had investments in only two passive activities. Activity A (acquired three years ago) produced tax losses totaling $40,000 in prior years and produces taxable income of $30,000 this year, while Activity B (acquired this year) has produced taxable income of $10,000 through the end of this year. Assuming no at-risk limitations apply, what is the total amount of Josh’s suspended passive activity losses after the end of this year? *Please include how you arrived at this...
1. The basis of inherited property is its adjusted basis on the date of the decedent’s...
1. The basis of inherited property is its adjusted basis on the date of the decedent’s death (unless the alternative valuation date is elected). Group of answer choices True False 2. Mary sells a parcel of land (basis of $10,000) and receives cash of $18,000 from the buyer. In addition, the buyer assumes Mary’s mortgage of $12,000 on the land. True or False: Mary’s realized gain is $20,000. Group of answer choices True False 3. Realized gains and realized losses...
Lisa sells business property with an adjusted basis of $152,700 to her son, Alfred, for its...
Lisa sells business property with an adjusted basis of $152,700 to her son, Alfred, for its fair market value of $122,160. If an amount is zero, enter "0". a. What is Lisa's realized and recognized gain or loss? Lisa has a $..............fill in the blank 1 realized loss of which $...........fill in the blank 3 is recognized. b. What is Alfred's recognized gain or loss if he subsequently sells the property for $167,970? For $99,255? If Alfred sells the property...
Sally owns real property for which the annual property taxes are $9,000. She sells the property...
Sally owns real property for which the annual property taxes are $9,000. She sells the property to Kate on March 9, 2019, for $550,000. Kate pays the real property taxes for the entire year on October 1, 2019. How much of the property taxes can be deducted by Sally and how much by Kate? What effect does the property tax apportionment have on Kate’s adjusted basis in the property? What effect does the apportionment have on Sally’s amount realized from...
Rhonda owns an interest in a limited partnership (a passive activity), and her share of the...
Rhonda owns an interest in a limited partnership (a passive activity), and her share of the partnership's loss is $26,000. Her tax basis in the partnership is $27,000, and her at-risk amount is $21,000. In addition to the loss from the partnership, Rhonda has $60,000 of income from her salary, $2,000 of interest from corporate bonds, and $29,000 of income from another limited partnership (a passive activity). What amount of the partnership loss may Rhonda deduct in the current year?...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT