· Question 1
2 out of 2 points
A taxpayer is considered to be a material participant in a significant participation activity if he or she spends at least 400 hours in the activity.
· Question 2
2 out of 2 points
Arts at-risk amount in a passive activity was $60,000 at the beginning of 2012. His loss from the activity in 2012 is $80,000, and he had no passive activity income during the year. Art had $20,000 of passive income from the activity in 2013. Under the passive loss rules, Arts suspended loss at the end of 2013 is:
· Question 3
2 out of 2 points
All of a taxpayers tax credits relating to a passive activity can be utilized when the activity is sold at a loss.
· Question 4
2 out of 2 points
In 2013, Arnold invests $80,000 for a 20% interest in a partnership in which he is a material participant. The partnership incurs a loss with $100,000 being Arnolds share. Which of the following statements is incorrect?
· Question 5
2 out of 2 points
In 2013, Joanne invested $90,000 for a 20% interest in a limited liability company (LLC) in which she is a material participant. The LLC reported losses of $340,000 in 2013 and $180,000 in 2014. Joannes share of the LLCs losses was $68,000 in 2013 and $36,000 in 2014. How much of these losses can Joanne deduct?
· Question 6
2 out of 2 points
Gail exchanges passive Activity A, which has suspended losses of $15,000, for passive Activity B in a nontaxable exchange. The new owner of passive Activity A can offset the $15,000 suspended losses against passive income in the future.
· Question 7
2 out of 2 points
Nell sells a passive activity with an adjusted basis of $45,000 for $105,000. Suspended losses attributable to this property total $45,000. The total gain and the taxable gain are:
· Question 8
2 out of 2 points
Kate dies owning a passive activity with an adjusted basis of $100,000. Its fair market value at that date is $130,000. Suspended losses relating to the property were $45,000.
· Question 9
2 out of 2 points
Paula owns four separate activities. She elects not to group them together as a single activity under the appropriate economic unit standard. Paula participates for 130 hours in Activity A, 115 hours in Activity B, 260 hours in Activity C, and 100 hours in Activity D. She has one employee, who works 125 hours in Activity D. Which of the following statements is correct?
Question 10
2 out of 2 points
Maria, who owns a 50% interest in a restaurant, has been a material participant in the restaurant activity for the last 20 years. She retired from the restaurant at the end of last year and will not participate in the restaurant activity in the future. However, she continues to be a material participant in a retail store in which she is a 50% partner. The restaurant operations produce a loss for the current year, and Marias share of the loss is $80,000. Her share of the income from the retail store is $150,000. She does not own interests in any other activities.