1. Sally sells a passive activity with an adjusted basis of $145,000 for $225,000. Suspended losses attributable to this property total $35,000. The total gain and the taxable gain are:
a.$80,000 total gain; $80,000 taxable gain.
b.$45,000 total gain; $45,000 taxable gain.
c.$80,000 total gain; $0 taxable gain.
d.$80,000 total gain; $45,000 taxable gain.
e.None of the above.
2. Sycamore Corporation, a closely held nonpersonal service corporation, has $300,000 of passive losses, $240,000 of active business income, and $40,000 of portfolio income. How much of the passive loss may Sycamore Corporation deduct?
a. $0.
b. $40,000.
c. $240,000.
d. $300,000.
e. None of the above