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samples Ch11 - Investor Losses CHAPTER 11 INVESTOR LOSSES...

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Investor Losses 11-1 CHAPTER 11 INVESTOR LOSSES EXAMINATION QUESTIONS 1. Eric owns five activities. He elects not to group them together as a single activity under the "appropriate economic unit" standard. He participates for 100 hours in Activity A, 140 hours in Activity B, 240 hours in Activity C, 99 hours in Activity D, and 120 hours in Activity E. Which of the following statements is correct ? a. Eric is a material participant with respect to Activities A, B, C, D, and E. b. Eric is a material participant with respect to Activities B, C, and E only. c. Activities A, B, C, D and E are all significant participation activities. d. Activities B, C and E are all significant participation activities. e. None of the above. 2. Wanda owns four separate activities. She elects not to group them together as a single activity under the “appropriate economic unit” standard. Wanda participates for 111 hours in Activity A, 155 hours in Activity B, 115 hours in Activity C, and 120 hours in Activity D. She has one employee, who works 400 hours in Activity D. Which of the following statements is incorrect ? a. Losses from all of the activities can be used to offset Wanda’s active income. b. Wanda is a material participant with respect to Activities A, B, C, and D. c.
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This note was uploaded on 03/05/2011 for the course ACCT 4494 taught by Professor Burks during the Spring '11 term at Troy.

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samples Ch11 - Investor Losses CHAPTER 11 INVESTOR LOSSES...

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