In_Class_Assignment_1_Reality_Check_Solution

In_Class_Assignment_1_Reality_Check_Solution - Name _ Tax...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Name _________________________________ Tax Research Spring 2010 In-Class Exercise #1 (5 points) “Reality Check” Solution Please respond to the following questions to the best of your ability. 1. Sarah (not in the loan business) loaned William $10,000 two years ago. During the current year, William declared bankruptcy. For the current year, Sarah also received $50,000 in wages and recognized a $6,000 STCG. What is Sarah’s AGI for the year? $10,000 is a non-business bad debt = STCL. She can deduct $6,000 against her STCG and another $3,000 against her wages. AGI = 50,000 + 6,000 – 9,000 = $47,000. She has a $1,000 STCL carryforward 2. Robert’s at-risk basis in Activity A at the beginning of 2008 is $30,000. During 2009 he has a passive loss from Activity A of $35,000, and passive income from Activity B of $20,000. How much of Activity A’s loss can Robert deduct in 2009? $20,000. 3. Complete the following Table: Questions General Partnership S Corporation C Corporation Who Pays tax on the entity’s income? Partners or the Partnership Shareholders or the Corporation Shareholders or the Corporation Are operating losses passed through to owners? YES
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/25/2010 for the course TAX 6845 taught by Professor Kelliher,c during the Spring '08 term at University of Central Florida.

Page1 / 4

In_Class_Assignment_1_Reality_Check_Solution - Name _ Tax...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online