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What is tax treatment of suspended passive activity losses

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Problem - In the current year, Abe gives an interest in a passive activity to his daughter, Andrea. The value of the interest at the date of the gift is $25,000, and its adjusted basis to Abe is $13,000. During the time that Abe owned the investment, losses of $3,000 could not be deducted because of the passive activity loss limitations. What is the tax treatment of the suspended passive activity losses to Abe and Andrea?

Reference no: EM132668457

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