29 Jun D. None of the above statements is false.
Question
83. Ms. Plant owns and actively manages an apartment complex. This year, the complex generated a $32,790
net loss. If Ms. Plant’s AGI before considering this loss is $196,100, and she owns no other passive
activities, how much of the loss is deductible this year?
A. $0
B. $25,000
C. $32,790
D. None of the above
84. Mr. Vernon owns stock in two S corporations, Able Corporation and Benson Inc. This year, Mr. Vernon
had the following income and loss items.
If Vernon materially participates in Able’s business but not in Benson’s business, compute his AGI.
A. $94,000
B. $74,000
C. $61,000
D. $41,000
85. Ms. Watts owns stock in two S corporations, MKP Corporation and Reynolds Inc. This year, Ms. Watts
had the following income and loss items.
If Ms. Watts materially participates in the business of both corporations, compute her AGI.
A. $85,700
B. $113,700
C. $127,700
D. $155,700
86. Ms. Cowler owns stock in Serzo Inc., an S corporation, and an interest in OTW Partnership. This year,
Ms. Cowler had the following income and loss items.
If Ms. Cowler’s interests in Serzo and OTW are passive activities, compute her AGI.
A. $68,000
B. $65,600
C. $85,000
D. $66,800
87. Mr. and Mrs. Nelson operate a small business as a sole proprietorship. This year, they have the following
tax information.
A. $50,900
B. $47,367
C. $50,147
D. None of the above
88. In 2010, Mr. Margot purchased a limited interest in a business partnership, which is her only passive
activity. In 2010, she was allocated $14,900 of the partnership’s ordinary business loss. In 2011, she was
allocated $7,700 of the partnership’s ordinary business income. Which of the following statements is
false?
A. In 2010, Mr. Margot could not deduct any of her allocated partnership loss.
B. In 2011. Mr. Margot can deduct $7,700 of the 2010 loss.
C. Mr. Margot has a $7,200 passive activity loss carryforward into 2012.
D. None of the above statements is false.
89. Mr. and Mrs. Perry own stock in an S corporation, which is their only passive activity. They have an
$8,200 passive activity loss carryforward into 2011. In 2011, the Perrys are allocated a $1,600 share of
corporate ordinary business income. Late in 2011, they recognize a $3,500 long-term capital gain on the
sale of their entire stock interest. How much of their loss carryforward can the Perrys deduct in 2011?
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