What Is the Correct Order of the Loss-Limitation Rules

question 89

Multiple Choice

What is the correct order of the loss-limitation rules?

• A)Tax basis, at-risk amount, passive loss limits.
• B)At-risk amount, tax basis, passive loss limits.
• C)Passive loss limits, at-risk amount, tax basis.
• D)Tax basis, passive loss limits, at-risk amount.
• E)Passive loss limits, tax basis, at-risk amount.

---

Definitions:

Operating Assets

Operating assets are assets required for a company to conduct its daily business operations, excluding any financial investments.

Return On Investment

A metric utilized to assess the effectiveness or return on investment (ROI) or to compare the performance of various investments.

Interest Expense

The cost incurred by an entity for borrowing funds, typically calculated as a percentage of the principal loan amount.

Segment Performance

An evaluation of the results of a particular business segment's operations, often used to assess its profitability and efficiency.