Isabel made a gift to Joseph of a passive activity with an adjusted basis of $75,000, suspended losses of $25,000, and a fair market value of $120,000. Which of the following statements is true ?

a. Joseph’s adjusted basis is $120,000.

b. Joseph’s adjusted basis is $75,000, and Isabel can deduct the $25,000 of suspended losses in the future.

c. Joseph’s adjusted basis is $75,000, and $25,000 of suspended losses are lost.

d. Joseph’s adjusted basis is $100,000.

e. None of the above

Answer rating: 100% (QA)

The correct option is d d josephs adjusted basis is ... View the full answer