A Taxpayer Had the Following for the Current Year IIf the Taxpayer Is a Closely Held Corporation,taxable Income from

question 25

Multiple Choice

A taxpayer had the following for the current year:
$\begin{array}{lrrr}&\text { Active } & \text { Portfolio } & \text { Passive } \\&\text { Income }&\text { Income }&\text { Income }\\\text { Income } & \$ 75,000 & \$ 22,000 & \$ 55,000 \\\text { Deductions }&(45,000) &(16,000) &(110,000) \\\text { Income(Loss) } & \$ 30,000 & \$ 6,000 & \$(55,000) \end{array}$
I.If the taxpayer is a closely held corporation,taxable income from the three activities is income of $6,000.
II.If the taxpayer is an individual and the passive income is not related to a rental real estate activity,taxable income is $36,000.

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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