Catfish,Inc

question 67

Multiple Choice

Catfish,Inc.,a closely held corporation which is not a PSC,owns a 45% interest in Trout Partnership,which is classified as a passive activity.Trout's taxable loss for the current year is $250,000.During the year,Catfish receives a $60,000 cash distribution from Trout.Other relevant data for Catfish are as follows: How much of Catfish's share of Trout's loss may it deduct in calculating its taxable income?

• A)$0.
• B)$20,000.
• C)$45,000.
• D)$112,500.
• E)None of the above.

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Definitions:

Standard Cost Accounting System

A cost accounting system that assigns preset costs to products or services, used for budgeting and controlling expenses.

Ideal Standards

Benchmark levels of performance set under perfect operating conditions, used for budgeting and measuring efficiency.

Materials Price Variance

The difference between the actual cost of materials and the standard or expected cost.

Standard Costs

Predetermined costing used in budgeting and decision-making, representing an expected cost under normal conditions.