C corporation which is not a personal service corporation can adjust loss from passive activity against net active income but not from portfolio income.
Only $40,000 passive activity loss can be adjusted because the net active income is $40,000.
Taxable income = $15,000
Exercise 3-25 (LO. 1) Hummingbird Corporation, a closely held and a $45,000 loss from a passive...
Woodchuck, Inc., a closely held personaliserade corporation, has $115,000 of net active income, $40,000 of portfolio income, and $135,000 of passive activity loss. What is Woodchuck's taxable income for the current year? a b. $20,000 S $155,000 d. $40,000 e. None of these choices are correct
according to the following 2017 data for floyd company, a closely held corporation, what is its taxable income? Net passive loss. $5,000 Net active income. $3,000 Net portfolio income $4,000 A. $2,000 B. $3,000 C. $4,000 D. $7,000
•Taxpayer has income from K-1s as follows: •(10,000) active K-1 •15,000 active K-1 •40,000 passive K-1 •(25,000) passive K-1 •(20,000) passive loss carryforward from prior year •What net income is reported by taxpayer from this activity?
Peach Corporation had $210,000 of net active income, 545,000 of portfolio income, and a $230,000 pastive loss during the current year. If Peach is a closely held corporation that is not a PSC, it can deduct $210,000 of the passive loss in the year. True False
Exercise 11-28 (Algorithmic) (LO. 3) Lucy sells her partnership interest, a passive activity, with an adjusted basis of $341,500 for $375,650. In addition, she has current and suspended losses of $51,225 associated with the partnership and has no other passive activities. a. Calculate Lucy's total gain and her current deductible loss. Her total gain is $ 25,000 X and her deductible loss is $ -3,000 X. b. What type of income can the deductible loss offset? Lucy's deductible loss is...
Discussion Question 11-5 (LO. 3) Carlos owns an interest in an activity that produces a $100,000 loss during the year. Complete the statements below regarding whether Carlos would prefer to have the activity classified as active or passive. Generally, if an activity is classified as passive, a loss from that activity can offset active, passive, and portfolio x income. If the activity is classified as active, the loss can offset income from only active and portfolio X . Therefore, Carlos...
Problem 3-38 (LO. 1, 3) In the current year, Tanager Corporation (a calendar year C corporation) had operating income of $480,000 and operating expenses $390,000. In addition, Tanager had a long-term capital gain of $55,000 and a short-term capital loss of $40,000. a. Compute Tanager's taxable income and tax for the year. Taxable income: $ 105,000 Income tax: $ 24,200 x Feedback Check My Work Capital gains and losses result from the taxable sales or exchanges of capital assets. Whether...
Problem 11-43 (LO. 3) Sarah has investments in four passive activity partnerships purchased several years ago. Last year the income and losses were as follows: Activity Income (Loss) $30,000 (30,000) (15,000) (5,000) In the current year, she sold her interest in Activity D for a $10,000 gain. Activity D, which had been profitable until last year, had a current loss of $1,500. Answer the following questions to determine how the sale of Activity D affects Sarah's taxable income in the...
Exercise 20-14 (LO. 1) The entity reports the following transactions for the 2019 tax year. The trustee accumulates all accounting income for the year. Operating income from a business Dividend income, all from U.S. corporations Interest income, City of San Antonio bonds Fiduciary fees, deductible portion Net rental losses, passive activity $500,000 30,000 40,000 (15,000) (100,000) Click here to access tax table for this problem. Carryout the tax computations to two decimal places. Compute the Federal income tax liability for...
Problem 6-33 (LO. 5, 6, 8) Five years ago, Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2018, his amount at risk in the activity was $30,000. His shares of the income and losses were as follows: Year Income (Loss) 2018 ($40,000) 2019 (30,000) 2020 50,000 Gerald holds no suspended at-risk or passive activity losses at the beginning of 2018. If an answer is zero, enter "0". a. If losses were limited only by...