Homework Wk 8.doc

Homework Wk 8.doc - Chapter 11. 18. Suzannes activities are...

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Chapter 11. 18. Suzanne’s activities are treated as passive activities because her participation in them is less than 500 hours. She could meet the significant participation test by participating for 30 more hours in the activity. She would be considered a material participant in her activities and her losses could be deductible against her active and portfolio income. Another option for Suzanne would be if she has passive activity loss, she can generate passive activity income that can be sheltered by existing loss. One approach is to buy an interest in a passive activity that is generating income. Then the loss can offset by passive income. 30. Matt can deduct up to $25000 of losses from real estate rental activities against active and portfolio income, but he must actively participate in the activity. The annual $25000 deduction is reduced by 50% of Matt’s AGI in excess of $100000. Thus, the entire deduction is phased out at $150000 of AGI. The $25000 allowance is available after all active participation rental losses and gains are netted and applied to other passive income. If Matt has a real estate rental loss in excess of the amount that can be deducted under the real estate rental exception that excess is treated as a passive loss. 26. Losses from real estate rental activities are not treated as passive losses for the real estate professionals. Therefore, if Hilda is a real estate professional and performs more than 750 hours of services in this real property as a material participant and if more than half of the personal services are performed in real property business, she would be able to treat the $60000 of loss as nonpassive. 37. For 2009, Russell will not be able to deduct any passive loss. The $40000 loss is suspended and
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This note was uploaded on 07/09/2011 for the course ACCT 307 taught by Professor 1 during the Spring '10 term at Strayer.

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Homework Wk 8.doc - Chapter 11. 18. Suzannes activities are...

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