In 2017 John disposes of a passivie activity with an adjuste

In 2017 John disposes of a passivie activity with an adjusted basis of $50,000 for $125,000 and suspended losses of $50,000. What is the total gain and the taxable gain for this activity? o a. $75,000 total gain; $125,000 taxable o b. $75,000 total gain, $25,000 taxable gain. o c. $75,000 total gain, $0 taxable gain od. $60,000 total gain, $15,000 taxable gain. gain

Solution

Ans Rationale: $ 125000 amount realised - $ 50000 adjusted basis = $ 75000

$75000 total gain - $ 50000 suspended loss = $ 25000 taxable gain

Ans is b) $ 75000 & $ 25000