Billy ray owns several parcels of rental real estate

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Income Tax Fundamentals 2019
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Chapter 4 / Exercise 12
Income Tax Fundamentals 2019
Whittenburg/Gill
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41. Billy Ray owns several parcels of rental real estate, and he actively participates in managing the properties. His total loss from these activities in 2013 is $30,000 and his AGI for 2013 is $110,000. How much of the disallowed loss from rental real estate activities may be carried over to future years?a. 0%b. 10%c. 50%*d. 100%
42. Billy Ray owns several parcels of rental real estate, and he actively participates in managing the properties. His total loss from these activities in 2013 is $30,000 and his AGI for 2013 is $110,000. For how many years may the disallowed loss be carried forward?
43. The percentage of passive losses that may offset nonpassive income for 2013 is:
44. Which of the following statements is correct?
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Income Tax Fundamentals 2019
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Chapter 4 / Exercise 12
Income Tax Fundamentals 2019
Whittenburg/Gill
Expert Verified
45. Which of the following statements is incorrect?a. A vacation home becomes a personal residence when its owner uses it more than the greater of 14 days or 10 percent of the number of rental days.b. If a dwelling is classified as a personal residence, rental losses are not deductible.*c. If an individual rents out a vacation home for more than 14 days and does not use it excessively for personal purposes, losses are allowed to be deducted from AGI.d. If an individual actively participates in the rental real estate activity, up to $25,000 of losses can be used to offset nonpassive income.
46. John Hughes is in the business of truck farming (i.e., growing tomatoes, bell peppers and green beans). During the year, one of his barns was completely destroyed by fire. The adjusted basis of the barn was $100,000. The fair market value of the barn before the fire was $80,000. The barn was insured for 90% of its fair market value and John recovered this amount under the insurance policy. John has adjusted basis for the year of $60,000 (before considering the casualty). Determine the amount of loss he can deduct on his tax return for the current year.

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