Jorge owns two passive investments, Activity A and Activity B. He plans to dispose of Activity A in the current year or next year. Juanita has offered to buy Activity A this year for an amount that would produce a taxable passive gain to Jorge of $115,000. However, if the sale, for whatever reason, is not made to Juanita, Jorge believes that he could find a buyer who would pay about $7,000 less than Juanita. Passive losses and gains generated (and expected to be generated) by Activity B follow:

Two years ago........ ($35,000)

Last year .......... (35,000)

This year .......... (8,000)

Next year ............ (30,000)

Future years ........Minimal profits

All of Activity B’s losses are suspended. Should Jorge close the sale of Activity A with Juanita this year, or should he wait until next year and sell to another buyer? Jorge is in the 28% tax bracket.