Accounting 440 Bank
1276. CHAPTER 11—INVESTOR LOSSES Question TF #1
Stuart is the sole owner and a material participant in a business in which he has $50,000 at risk. If the business incurs a loss of $80,000 from operations, Stuart can deduct the full amount.
a. True *b. False
1277. CHAPTER 11—INVESTOR LOSSES Question TF #2
Stan owns a 20% interest in a partnership (not real estate) in which his at-risk amount was $38,000 at the beginning of the year. During the year, the partnership borrows $80,000 on a nonrecourse note and incurs a loss of $50,000 from operations. Stan’s at-risk amount at the end of the year is $44,000.
a. True *b. False
1278. CHAPTER 11—INVESTOR LOSSES Question TF #3
In the current year, Rich has a $40,000 loss from a business he owns. His at-risk amount at the end of the year, prior to considering the current year loss, is $24,000. He will be allowed to deduct the $40,000 loss this year if he is a material participant in the business.
a. True *b. False
1279. CHAPTER 11—INVESTOR LOSSES Question TF #4
Judy owns a 20% interest in a partnership (not real estate) in which her at-risk amount was $35,000 at the beginning of the year. The partnership borrowed $50,000 on a recourse note and made a $40,000 profit during the year. Her at-risk amount at the end of the year is $43,000.
a. True *b. False
1280. CHAPTER 11—INVESTOR LOSSES Question TF #5
Tonya owns an interest in an activity (not real estate) that converted recourse financing to nonrecourse financing. Recapture of previously allowed losses is required if Tonya’s at-risk amount is reduced below zero as a result of the debt restructuring.
*a. True b. False
1281. CHAPTER 11—INVESTOR LOSSES Question TF #6
Kelly, who earns a yearly salary of $120,000, sold an activity with a suspended passive loss of $44,000. The activity was sold at a loss and Kelly has no other passive activities. The
Stuart is the sole owner and a material participant in a business in which he has $50,000 at risk. If the business incurs a loss of $80,000 from operations, Stuart can deduct the full amount.
a. True *b. False
1277. CHAPTER 11—INVESTOR LOSSES Question TF #2
Stan owns a 20% interest in a partnership (not real estate) in which his at-risk amount was $38,000 at the beginning of the year. During the year, the partnership borrows $80,000 on a nonrecourse note and incurs a loss of $50,000 from operations. Stan’s at-risk amount at the end of the year is $44,000.
a. True *b. False
1278. CHAPTER 11—INVESTOR LOSSES Question TF #3
In the current year, Rich has a $40,000 loss from a business he owns. His at-risk amount at the end of the year, prior to considering the current year loss, is $24,000. He will be allowed to deduct the $40,000 loss this year if he is a material participant in the business.
a. True *b. False
1279. CHAPTER 11—INVESTOR LOSSES Question TF #4
Judy owns a 20% interest in a partnership (not real estate) in which her at-risk amount was $35,000 at the beginning of the year. The partnership borrowed $50,000 on a recourse note and made a $40,000 profit during the year. Her at-risk amount at the end of the year is $43,000.
a. True *b. False
1280. CHAPTER 11—INVESTOR LOSSES Question TF #5
Tonya owns an interest in an activity (not real estate) that converted recourse financing to nonrecourse financing. Recapture of previously allowed losses is required if Tonya’s at-risk amount is reduced below zero as a result of the debt restructuring.
*a. True b. False
1281. CHAPTER 11—INVESTOR LOSSES Question TF #6
Kelly, who earns a yearly salary of $120,000, sold an activity with a suspended passive loss of $44,000. The activity was sold at a loss and Kelly has no other passive activities. The