Whether an activity is Passive and therefore category 2 income: A- Is based on the amount...
Whether an activity is Passive and therefore category 2 income:
A- Is based on the amount of debt employed in the activity.
B- is based strictly on the nature of the business.
C- Is not related to the number of service hours the individual provides the business.
D- Is often based on the number of service hours the individual provides the business.
Homework Answers
Passive Activity Incomes are those that requires a little bit efforts Like Rental Income or Amount of Debt given. So, As per option Given "It is based on the amount of debt employed in the activity. Hence, Option "A" should be right.
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Whether an activity is Passive and therefore category 2 income: A- Is based on the amount...
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Rhonda has an adjusted basis and an at-risk amount of $12,400 in a passive activity at the beginning of the year. She also has a suspended passive activity loss of $2,480 carried over from the prior year. During the current year, she has a loss of $19,840 from the passive activity. Rhonda has no passive activity income from other sources this year. Determine the following items relating to Rhonda's passive activity as of the end of the year. If an...
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explain please! 2. Chuck, an individual, has three separate passive activities and an at-risk amount in...
explain please!
2. Chuck, an individual, has three separate passive activities and an at-risk amount in excess of $40,000 for each. During the year, the activities produced the following amounts of net income (loss): Activity 1 ($40,000) Activity 2 ($10,000) Activity 3 $30,000 Net Passive Loss ($20,000) Chuck's suspended losses for the current year are as follows: Activity 1 Activity 2 $40,000 $10,000 $10,000 $10,000 $16,000 $4,000 $4,000 $16,000 $0
Nell earns $50,000 salary income in the current year. In addition, Nell sells a passive activity...
Nell earns $50,000 salary income in the current year. In addition, Nell sells a passive activity with an adjusted basis of $45,000 for $155,000 in the current year. Suspended losses attributable to this property total $45,000. Nell owns another separate passive activity which has $10,000 passive loss for the current year and $80,000 suspended passive losses from prior years. Nell will report the following on her current year income tax return (as a result of just these transactions): a. $$50,000...
[32] If an individual taxpayer's suspended passive losses and credits from an activity other than rental...
[32] If an individual taxpayer's suspended passive losses and credits from an activity other than rental real estate cannot be used in the current year, they may be carried A. Back 2 years, but they cannot be carried forward. B. Forward up to a maximum period of 20 years, but they cannot be carried back. C. Back 2 years or forward up to 20 years, at the taxpayer's election. D. Forward indefinitely or until the property is disposed of in...
For purposes of the Net Investment Income (NII) calculations: A) Category 2 income can be reduced...
For purposes of the Net Investment Income (NII) calculations: A) Category 2 income can be reduced by a Category 1 loss. B) Category 2 income can only be earned by a material participant in the business. C) category 2 income may be a net loss or net income. D) The active participant does not include in Category 3 income gain from the sale of trade or business equipment for the active participant in the business.
Problem 3-41 (LO. 5) 1. Indicate whether the following individuals are "Required" (based on income) or...
Problem 3-41 (LO. 5) 1. Indicate whether the following individuals are "Required" (based on income) or "Not required" to file a tax return for 2020. Click here to access the standard deduction tables to use. Required / Not Required a. b. c. Patricia, age 19, is a self-employed single individual with gross income of $5,200 from an unincorporated business. Business expenses amounted to $4,900. Mike is single and is 67 years old. His gross income from wages was $12,750. Ronald...
Please show all calculations. 14. Shunwei reports the following income and loss: Salary Income from activity...
Please show all calculations.
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Problem 11-43 (LO. 3) Sarah has investments in four passive activity partnerships purchased several years ago....
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...
explain please!
2. Chuck, an individual, has three separate passive activities and an at-risk amount in excess of $40,000 for each. During the year, the activities produced the following amounts of net income (loss): Activity 1 ($40,000) Activity 2 ($10,000) Activity 3 $30,000 Net Passive Loss ($20,000) Chuck's suspended losses for the current year are as follows: Activity 1 Activity 2 $40,000 $10,000 $10,000 $10,000 $16,000 $4,000 $4,000 $16,000 $0
Problem 3-41 (LO. 5) 1. Indicate whether the following individuals are "Required" (based on income) or "Not required" to file a tax return for 2020. Click here to access the standard deduction tables to use. Required / Not Required a. b. c. Patricia, age 19, is a self-employed single individual with gross income of $5,200 from an unincorporated business. Business expenses amounted to $4,900. Mike is single and is 67 years old. His gross income from wages was $12,750. Ronald...
Please show all calculations.
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