Income taxation take home quiz 2 f 15

Income taxation take home quiz 2 f 15 - INDIVIDUAL INCOME...

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INDIVIDUAL INCOME TAXATION Take Home Quiz 2 Fall 2015 PROBLEM 1 Pamela earns a yearly salary of $150,000. During year 1 she invested $80,000 for a 20% interest in a passive activity. In addition, her share of the activity’s nonrecourse debt is $20,000. Operations of the activity in year 1 resulted in a loss of $500,000, of which Pamela’s share is $100,000. She has income for year 1 from another passive activity in the amount of $5,000. For year 1, what is Pamela’s deductible loss under the tax basis rules, suspended loss under the tax basis rules, deductible loss under the at risk rules, suspended loss under the at risk rules, and deductible loss under the passive activity loss rules, and suspended loss under the passive activity loss rules? PROBLEM 2 Part 1 : Green Corp., a cash basis and calendar year taxpayer, was formed and began operations on August 22, 2014. Green incurred the following expenses during its first year of operations (August 22 – Dec. 31): Expenses of temporary directors and organizational meetings $24,000
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