A taxpayer is considered to be at risk under the at risk rules for which of...

A taxpayer is considered to be at risk under the at risk rules for which of the following and under what section of the Code?

a. money borrowed by another for which payment is guaranteed by the taxpayer; Code Section 469(a).

b. money borrowed by the taxpayer from another who has an equity interest in the taxpayer’s business; Code Section 61.

c. qualified nonrecourse financing; Code Section 469.

d. qualified nonrecourse financing; Code Section _____(if you conclude none of a, b, or c is correct, write in the citation for the correct section of the Internal Revenue Code, including the subsection and paragraph, if applicable).

Solutions

Expert Solution

Under section 465 a taxpayer is considered to be at risk under the at risk rules. It is important that the tax payer must carefully track the activities to ensure these are separate activities as elaborated in section 465 (a) (1) for “at risk”. Thus, none of the options, i.e. a, b or c is correct.

ekkarill92 answered 2 years ago

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