Question

11. Assume that in 2019 Taxpayer makes a donation to qualified public charity of real estate held by Taxpayer for investment for five years and having a fair market value of $20,000 on the date of the contribution. Taxpayer's basis in the property is $30,000. How much loss or deduction would be allowable to or recognized by taxpayer as a result of this transaction?

a.             Taxpayer would recognize a capital loss of $10,000 that may be used to offset Taxpayer’s capital gains.

b.             There would be no deductible loss allowable with respect to the inherent loss in the property, but taxpayer may take a charitable deduction of $20,000 subject to the adjusted gross income percentage limitation, and provided Taxpayer itemizes deductions.

c.             Taxpayer may carry over the loss until Taxpayer makes a bargain sale of other real estate to a public charity.

d.             Taxpayer’s allowable charitable income tax deduction would be $30,000.

______________________________________________________________________________________________________________________________________________________12. During 2019, Hugh had the following net income and loss with respect to nonrental nonreal estate activities:

Activity X	($50,000) net loss
Activity Y	$20,000 net income

Both Activity X and Activity Y are passive activities to Hugh. Hugh purchased Activity X in 1987 and Activity Y in 1993. How much loss that Hugh may deduct in 2019?

a.         ($50,000)

b.         ($30,000)

c.         ($3,000)

d.         $0

e.       None of these

13. Billy owns several parcels of rental real estate, and he actively participates in managing the properties. His total loss from these activities in 2018 is $30,000. Assuming that his AGI for 2018 is $110,000, what is the allowable deduction from these properties in 2018?

a.         $0

b.         $15,000

c.         $20,000

d.         $30,000

14: Billy owns several parcels of rental real estate, and he actively participates in managing the properties. His total loss from these activities in 2018 is $30,000 and his AGI for 2018 is $110,000. How much of the disallowed loss from rental real estate activities may be carried over to future years?

a.         0%

b.         10%

c.         50%

d.         100%

15: Billy owns several parcels of rental real estate, and he actively participates in managing the properties. His total loss from these activities in 2018 is $30,000 and his AGI for 2018 is $110,000. For how many years may any disallowed loss be carried forward?

a.         The disallowed loss may not be carried forward.

b.         The disallowed loss may be carried forward for 15 years.

c.         The disallowed loss may be carried forward for 15 years, but only after it has been carried back for 3 years.

d.         The disallowed loss may be carried forward indefinitely.

Answer 1

Answer :

(11).

(a). Tax payer would recognize a capital loss of $10,000 that may be used to offset Taxpayer's capital gains.

Explanation : As property is hold for 5 years there is capital loss

(12).

(e). None of these

As per IRS maximum deduction limit is $25,000 after adjusting passive loss with passive income .

It is standardized. No explanation is required.

(13).

(c). $20,000

Explanation :

Total passive loss	$30,000
Maximum limit of deduction $25000 for AGI below $100000		$25,000
therefore, Phaseout (110000 -100000)*50%		$5,000
Allowable deduction from these properties in 2018		$20,000

(14).

(d). 100%

Explanation : It is standardized

(15).

(d). The disallowed loss may be carried forward indefinitely

Explanation : It is standardized.

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