Question: Jeremy owns a passive activity that has a basis of $30,000 and a suspended loss of $16,000. His taxable income from active and portfolio income

Jeremy owns a passive activity that has a basis of $30,000 and a suspended loss of $16,000. His taxable income from active and income is $81,000.
a. What is the effect on Jeremy’s taxable income if he sells the passive activity for $37,000?
b. What is the effect on Jeremy’s taxable income if he sells the passive activity for $25,000?

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