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credit_equivalent_solution - (revised AGI = $60,000 He does...

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Topic: Tax credit equivalency [Solution] Irving has AGI of $80,000 before considering the following rental activities. He is active in three separate real estate rental activities which generate the following income (loss and credits. Irving’s marginal tax rate is 28%. Activity Income (loss) Tax credits A (12,000) 2,100 B (18,000) C 10,000 Required : Calculate Irving’s current-year deductions & credits, and the suspended losses and credits. Under the small landlord exception Irving can deduct $20,000 against her other income
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Unformatted text preview: (revised AGI = $60,000). He does not have any suspended passive losses. Activity Income (loss) Tax credits A (12,000) 2,100 B (18,000) C 10,000 Net passive loss (20,000) After deducting the net passive loss of $20,000, Irving has a deduction of $5,000 remaining [$25,000 (maximum loss allowed) – $20,000 (utilized loss)]. Therefore, the maximum credit Irving may claim this year is $1,400 [$5,000 (remaining deduction) x 28% (marginal tax rate)]. Irving has a suspended tax credit of $700....
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