Josh has investments in two passive activities. Activity A (acquired three years ago) produces income of $30,000 this year, while Activity B (acquired two years ago) produces a loss of $50,000 . What is the amount of Josh's suspended loss for the year?
a. $0
b. $18,000
c. $20,000
d. $50,000
e. None of the above
c
RATIONALE: The $30,000 of passive activity income is offset by $30,000 of the $50,000 passive activity loss, leaving a net passive activity loss of $20,000 . None of the $20,000 net passive activity loss is deductible in the current year and it is all suspended.
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