Vic's At-Risk Amount in a Passive Activity Is $200,000 at the Beginning

question 76

Multiple Choice

Vic's at-risk amount in a passive activity is $200,000 at the beginning of the current year.His current loss from the activity is $80,000.Vic had no passive activity income during the year.At the end of the current year:

• A)Vic has an at-risk amount in the activity of $120,000 and a suspended passive loss of $80,000.
• B)Vic has an at-risk amount in the activity of $200,000 and a suspended passive loss of $80,000.
• C)Vic has an at-risk amount in the activity of $120,000 and no suspended passive loss.
• D)Vic has an at-risk amount in the activity of $200,000 and no suspended passive loss.
• E)None of the above.

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Definitions:

Expected Return

Expected return is the average amount of profit or loss an investment is projected to generate, based on historical data or statistical analysis.

Beta

An evaluation of how a security or a portfolio's risk level and volatility compare with those of the overall market.

PVGO

Present Value of Growth Opportunities (PVGO) refers to the component of a company's stock price that is attributed to future investments' expected net present value.

Market Capitalization Rate

It's the rate of return on a real estate investment property based on the expected income that the property will generate.