Question
In: Accounting
Sarah has investments in four passive activity partnerships purchased several years ago. Last year the income...
Sarah has investments in four passive activity partnerships purchased several years ago. Last year the income and losses were as follows: Activity Income (Loss) A $30,000 B (30,000) C (15,000) D (5,000) In the current year, she sold her interest in Activity D for a $10,000 gain. Activity D, which had been profitable until last year, had a current loss of $1,500. Answer the following questions to determine how the sale of Activity D affects Sarah's taxable income in the current year.
a. The amount of suspended losses carried forward to the year of the sale is $ .
b. What amount of the suspended losses is allocated to Activity D? $
c. How much, if any, of this net gain may be used to absorb passive activity losses from other activities?
Solutions
Expert Solution
Answer:
The answer for the question is provided in the images below:
ekkarill92 answered 1 year agoRelated Solutions
1. Sandra acquired a passive activity three years ago. Until last year, the activity was profitable...
1. Sandra acquired a passive activity three years ago. Until
last year, the activity was profitable and her at-risk amount was
$120,000. Last year, the activity produced a loss of $100,000 and,
in the current year, the loss is $50,000. Assuming Sandra has
received no passive income in the current or previous year, her
suspended loss (under the passive activity loss provisions) as of
the end of the current year is:
a. $150,000
b. $120,000
c. $30,000
d. $0
e....
A four-year insurance policy in the amount of $20,000 was purchased two years ago. What is...
A four-year insurance policy in the amount of $20,000 was
purchased two years ago. What is the adjusting entry to record
insurance expense for the current year?
A.) DEBIT: Insurance Expense for $20,000; CREDIT: Prepaid
Insurance for $20,000
B.) DEBIT: Insurance Expense for $5,000; CREDIT: Prepaid
Insurance for $5,000
C.) DEBIT: Prepaid Insurance for $20,000; CREDIT: Insurance
Expense for $20,000
D.) DEBIT: Prepaid Insurance for $5,000; CREDIT: Insurance
Expense for $5,000
several years ago ys purchased a patent i. a production process for 250000 and has amortized...
several years ago ys purchased a patent i. a production process
for 250000 and has amortized 91000 of thr cost ys has learned that
a rical ckmpany recently developed a new provess that rebders the
patent worthless. Consequently ys made a public announcement that
it would no longer enforce the patent. What is the tax consequences
to ya of this unfortunate situation
Five years ago Gerald invested $116,000 in a passive activity, his sole investment venture. On January...
Five years ago Gerald invested $116,000 in a passive activity,
his sole investment venture. On January 1, 2019, his amount at risk
in the activity was $23,200. His shares of the income and losses
were as follows:
Year
Income (Loss)
2019
($34,800)
2020
(23,200)
2021
43,200
Gerald holds no suspended at-risk or passive activity losses at
the beginning of 2019.
If an answer is zero, enter "0".
c. Assuming Gerald has $50,000 income in 2021,
(and considering both at-risk and...
Charles and Ann live in a house that they purchased four years ago. It is a...
Charles and Ann live in a house that they purchased four years
ago. It is a large Victorian-era home with 12 rooms and cost them
$250,000 at the time
Charles has life insurance three times his salary (salary -
$81,000) from the college, and Ann has life insurance through her
employer for twice her salary(salary - $40,000). Charles and Ann
each purchased five-year term individual insurance policies from a
local insurance broker when they purchased the house, with a face...
Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah Ingram formed a partnership to...
Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah
Ingram formed a partnership to operate the Deli Sisters Cafe.
Rerouting of bus lines caused declines in patronage to the extent
that the partners have agreed to dissolve the partnership and
liquidate the assets. The November 2, 2014, balance sheet of the
Deli Sisters Cafe and other data appear below. The partnership
agreement did not specify how profits and losses were to be
shared.
DELI SISTERS CAFÉ
Balance Sheet...
Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah Ingram formed a partnership to...
Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah
Ingram formed a partnership to operate the Deli Sisters Cafe.
Rerouting of bus lines caused declines in patronage to the extent
that the partners have agreed to dissolve the partnership and
liquidate the assets. The November 2, 2014, balance sheet of the
Deli Sisters Cafe and other data appear below. The partnership
agreement did not specify how profits and losses were to be
shared.
DELI SISTERS CAFÉ
Balance Sheet...
Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah Ingram formed a partnership to...
Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah
Ingram formed a partnership to operate the Deli Sisters Cafe.
Rerouting of bus lines caused declines in patronage to the extent
that the partners have agreed to dissolve the partnership and
liquidate the assets. The November 2, 2020, balance sheet of the
Deli Sisters Cafe and other data appear below. Partnership income
and losses are shared in a 2:3:1:4 ratio.
DELI SISTERS CAFÉ
Balance Sheet
November 2, 2020
Cash...
Four years ago, Paul invested $1500. Three years ago, Trek invested $1600. Today, these two investments...
Four years ago, Paul invested $1500. Three years ago, Trek
invested $1600. Today, these two investments are each worth $1800.
Assume each account continues to earn its respective rate of
return.
(1) What is annual interest rate that Saul earned?
(2) What is annual interest rate that Trek earned？
(3) Was Trek’s investment worth less than Saul one year
ago?
In 2018, Robert had the following income and losses from four passive activities: Activity 1 $(20,000)...
In 2018, Robert had the following income and losses from four
passive activities:
Activity 1
$(20,000)
Activity 2
(10,000)
Activity 3
(5,000)
Activity 4
33,000
Activity 4 had $10,000 of passive losses that are carried over
from a prior year. Robert also had wages of $110,000.
How much income or loss does Robert have from the four
activities?
How are the suspended PALs allocated?
If Activity 1 were sold at an $18,000 gain, what would be the
total income or...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Suppose we are thinking about replacing an old computer with a new one. The old one...
- The project has a critical path that is 4 months long. We are now part way...
- Consider the following hypothetical microprocessor. Assume this processor uses 32-bit instructions. Assume the 32 bits are...
- C Programing How would i edit this code to have it return the cipher text. void...
- What are some ways that a company could fail at trying to become a glocalized business?
- MATLAB Create a 2 × 3 matrix variable mat. Pass this matrix variable to each of...
- Paste Corporation has established new plant for the production of new product called “Diazinon”. There are...
ADVERTISEMENT