Homework Answers
James has a thriving tax practice and therefore does not participate in the operation of the business. Which of the following is TRUE?
Ans: ( B) Only the income distributed to James is considered passive income.
Explanation:
1) James does not patricipate in the operation.
2) As per IRS,
Income is considered passive income, in which a person is not actively involved.
Hence ( B) is the correct answer.Rest all the options are incorrect.
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