FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Investor Losses

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

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

F) C) and E)
G) A) and D)

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

In the current year, Crow Corporation, a closely held C corporation that is not a personal service corporation, has $100,000 of passive activity losses, $80,000 of active business income, and $20,000 of portfolio income. How much of the passive activity loss may Crow deduct in the current year?

A) $0.
B) $20,000.
C) $80,000.
D) $100,000.
E) None of the above.

F) A) and E)
G) A) and B)

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

In 2018, Joanne invested $90,000 for a 20% interest in a limited liability company LLC) in which she is a material participant. The LLC reported losses of $340,000 in 2018 and $180,000 in 2019. Joanne's share of the LLC's losses was $68,000 in 2018 and $36,000 in 2019. How much of these losses can Joanne deduct?

During the current year, Ethan performs personal services as follows: 800 hours in his information technology consulting practice, 625 hours in a real estate development business, and 510 hours in a condominium leasing operation. He expects that losses will be realized from the two real estate ventures while his consulting practice will show a profit. Ethan files a joint return with his spouse whose salary is $125,000. The income and losses from the following ventures is considered active and not subject to the passive activity loss limitations:

A taxpayer is considered to be a material participant if he or she spends more than 500 hours in the activity.

Ken has a $40,000 loss from an investment in a partnership in which he does not materially participate. He paid $30,000 for his interest. How much of the loss is disallowed by the at-risk rules? How much is disallowed by the passive activity loss rules?

All of a taxpayer's tax credits relating to a passive activity can be utilized when the activity is sold at a loss.

In 2018, Liam invested $100,000 for a 25% interest in a partnership involved in an activity in which he is a material participant. The partnership reported losses of $340,000 in 2018 and $180,000 in 2019 with Liam's share being $85,000 in 2018 and $45,000 in 2019. How much of the losses can Liam deduct?

Linda owns investments that produce portfolio income and Activity A that produces losses. From a tax perspective, Linda will be better off if Activity A is not passive.

Vic's at-risk amount in a passive activity is $200,000 at the beginning of the current year. His current loss from the activity is $80,000. Vic had no passive activity income during the year. At the end of the current year: