Losses And Loss Limitations - Ch05

Losses And Loss Limitations - Ch05 - CHAPTER 5 LOSSES AND...

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CHAPTER 5 LOSSES AND LOSS LIMITATIONS SOLUTIONS TO PROBLEM MATERIALS Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 1 Bad debts: business Modified 1 2 Bad debts: tax benefit rule Unchanged 2 3 Bad debt and § 1244 stock Modified 3 4 § 1244 stock Unchanged 5 5 Issue recognition Unchanged 6 6 Transfer of § 1244 stock to another individual Unchanged 7 7 Casualty loss: amount of loss New 8 Casualty loss: disaster area loss Unchanged 8 9 Issue recognition Unchanged 9 10 Casualty loss: insurance recovery Unchanged 10 11 Net operating loss: calculation Modified 11 12 At-risk rules New 13 At-risk rules Unchanged 13 14 Issue recognition Unchanged 14 15 Passive loss rules: general application Unchanged 15 16 Passive loss rules: general application Unchanged 16 17 Sale of passive activity and suspended losses Modified 17 18 Sale of passive activity Unchanged 18 19 Passive losses of personal service corporation New 20 Passive losses of corporation Unchanged 20 21 Passive, active, portfolio income of non-PSC Unchanged 21 22 Groupings of two types of businesses Unchanged 22 23 Issue recognition Unchanged 23 24 Interaction of at-risk and passive loss rules Unchanged 24 25 Interaction of at risk and passive loss rules Unchanged 25 26 Interaction of at-risk and passive loss rules New 5-1 Status: Q/P
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5-22003 Entities Volume/Solutions Manual Question/ Present in Prior Problem Topic Edition Edition 27 Interaction of at-risk and passive loss rules Unchanged 27 28 Issue recognition Unchanged 28 29 Passive loss deduction amounts New 30 Rental loss: active participation Unchanged 30 31 Active income and passive income: real estate Unchanged 31 activities 32 Ethics problem Unchanged 32 33 Spousal participation in real estate activities Unchanged 33 34 Real estate rental exception Unchanged 34 35 Ethics problem Unchanged 35 36 Passive activity loss allowed, suspended losses Unchanged 36 and credits 37 Rental real estate loss deduction Unchanged 37 Bridge Discipline Problem 1 Bad debt expense Unchanged 1 2 At-risk rules Unchanged 2 3 Passive activity loss rules: general application Unchanged 3 Research Problem 1 Casualty loss Unchanged 1 2 Offsetting rent income by passive losses Unchanged 2 3 Passive activity: amount of deductible loss New 4 Internet activity Unchanged 4 5 Internet activity Unchanged 5 PROBLEM MATERIAL 1. Smith, Raabe, and Maloney, CPAs 5191 Natorp Boulevard Mason, OH 45040 January 29, 2002 Loon Finance Company 100 Tyler Lane Erie, PA 16563 Dear Sir: This letter is to inform you of the possibility of taking a bad debt deduction. Your loan to Sara is a business bad debt; therefore, you are allowed to take a bad debt deduction for partial worthlessness. You will be able to take a bad debt deduction in the current year of $26,000 ($30,000 - $4,000) based on partial worthlessness.
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Losses and Loss Limitations 5-3 Should you need more information or need to clarify anything, please contact me. Sincerely,
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Losses And Loss Limitations - Ch05 - CHAPTER 5 LOSSES AND...

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