Mr and Mrs

question 19

Multiple Choice

Mr. and Mrs. Perry own stock in an S corporation, which is their only passive activity. They have an $8,200 passive activity loss carryforward into this year. This year, the Perrys are allocated a $1,600 share of corporate ordinary business income. In December of this year, they recognize a $3,500 long-term capital gain on the sale of their entire stock interest. How much of their loss carryforward can the Perrys deduct this year?

• A) $0
• B) $5,100
• C) $8,200
• D) $1,600

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Definitions:

Stereotype

To place a person or group of persons into an inflexible, all-encompassing category.

Stereotyping

The act of assigning a fixed, oversimplified image or idea to a person or group, often based on limited information and resulting in prejudiced attitudes or actions.

Affection

A feeling of fondness or liking for someone or something, often shown through physical or verbal gestures.

Structure

The arrangement or organization of components within a system, or the framework that defines the relationship between different parts.