Homework Answers
First we have to learn about the Passive income.
Passive income is the income earned apart from salary or wages, investment or portfolio income (such as dividends).
Passive incomes are earnings from rental activity, a business or limited partnership in which a person is not actively involve etc. Passive income is usually taxable. Passive loss offsets against income.
Ron Jones has interest income of $30,000 which will be included in taxable income. Loss of $20,000 from the business is going to be offset against the income. Rental income of $8,000 will be included in the income and also the income of $9,000 from a limited partnership.
So increase in his taxable income would be = $30,000 + $8,000 + $9,000 - $20,000 = $27,000
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pace provided aterially participate in. He also has interest income 1. Ron Jones has...
Ron Jones has a $20,000 loss from a business that he does not materially participate in....
Ron Jones has a $20,000 loss from a business that he does not materially participate in. He also has interest income of $30,000. In addition, he has income of $8,000 from a rental activity that he is actively involved in and income of $9,000 from a limited partnership. Based on all of these sources, what is the increase in his taxable income for the year?
Jenna began the tax year with a tax basis of $30,000 in her partnership interest. Her...
Jenna began the tax year with a tax basis of $30,000 in her partnership interest. Her share of partnership debt consists of $11,000 of recourse debt and $14,000 of nonrecourse debt at the beginning of the year and $11,000 of recourse debt and $18,000 of nonrecourse debt at the end of the year. During the year, she was allocated $50,000 of partnership ordinary business loss. Jenna does not materially participate in this partnership, and she has $7,000 of passive income...
Paul, who is single, has $80,000 of salary, and $5,000 of passive income. He also has...
Paul, who is single, has $80,000 of salary, and $5,000 of passive income. He also has a $35,000 passive loss from a real estate rental activity in which he satisfies the requirements for ownership, basis, and "active participation". Of the $35,000 loss, how much is deductible in the current year? 1. $30,000 2. $25,000 3. $5,000 4. $15,000
Please read the facts of the case and prepare answers for the following questions : 1...
Please read the facts of the case and prepare answers for the
following questions :
1 – What is the relevance of the $2,000 monthly payment
to Dave Verden on the analysis of Jones’ financing needs?
2 – What metrics could you use to compare the historical financial
results for Jones with the projected financial results under the
four defined scenarios?
3 – Other than financing needs, what other issues should Jones
address as he considers the different growth
scenarios?...
Read below and answer, Why does a business that has profit of $30,000 per year need...
Read below and answer, Why does a business that has profit of
$30,000 per year need a bank loan?
Jones Electrical Distribution After several years of rapid growth, in the spring of 2007 Jones Electrical Distribution anticipated a further substantial increase in sales. Despite good profits, the company had experienced a shortage of cash and had found it necessary to increase its borrowing from Metropolitan Bank-a local one- branch bank-to $250,000 in 2006. The maximum loan that Metropolitan would make...
Please read the facts of the case and prepare answers for the
following questions :
1 – What is the relevance of the $2,000 monthly payment
to Dave Verden on the analysis of Jones’ financing needs?
2 – What metrics could you use to compare the historical financial
results for Jones with the projected financial results under the
four defined scenarios?
3 – Other than financing needs, what other issues should Jones
address as he considers the different growth
scenarios?...
Read below and answer, Why does a business that has profit of
$30,000 per year need a bank loan?
Jones Electrical Distribution After several years of rapid growth, in the spring of 2007 Jones Electrical Distribution anticipated a further substantial increase in sales. Despite good profits, the company had experienced a shortage of cash and had found it necessary to increase its borrowing from Metropolitan Bank-a local one- branch bank-to $250,000 in 2006. The maximum loan that Metropolitan would make...
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