Several Years Ago, Joy Acquired a Passive Activity

question 75

Short Answer

Several years ago, Joy acquired a passive activity. Until 2016, the activity was profitable. Joy's at-risk amount at the beginning of 2016 was $250,000. The activity produced losses of $100,000 in 2016, $80,000 in 2017, and $90,000 in 2018. During the same period, no passive activity income was recognized. How much is suspended under the at-risk rules and the passive activity loss rules at the beginning of 2019?

$\begin{array}{lr}\underline {\text { At-risk }}&\underline {\text { Passive activity loss }}\\a.\$ 0 & \$ 270,000 . \\ b.\$ 20,000 . & \$ 250,000 . \\c. \$ 30,000 . & \$ 240,000 . \\d. \$ 260,000 . & \$ 10,000 .\end{array}$

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Definitions:

Under the Influence

This term refers to being under the effect of substances, like drugs or alcohol, which can alter one's cognition, mood, or behavior.

Denial

A mental coping strategy in which a person denies the existence of certain real-life facts, effectively shielding themselves from recognizing external truths.

Interpretation of Stressful Events

The personal cognitive assessment and meaning attributed to situations perceived as challenging or threatening.

Stressful Situation

An event or scenario that causes strain or tension, requiring adaptation or response from the individual.