During the Current Year, Ethan Performs Personal Services as Follows

question 128

Multiple Choice

During the current year, Ethan performs personal services as follows: 800 hours in his information technology consulting practice, 625 hours in a real estate development business, and 510 hours in a condominium leasing operation. He expects that losses will be realized from the two real estate ventures while his consulting practice will show a profit. Ethan files a joint return with his spouse whose salary is $125,000. The income and losses from the following ventures is considered active and not subject to the passive activity loss limitations:

• A) Only the information technology consulting practice.
• B) Only the information technology consulting practice and the real estate development business.
• C) Only the information technology consulting practice and the condominium leasing operation.
• D) All three of the ventures are considered active and not subject to the passive activity loss limitations.
• E) None of the above.

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Definitions:

Wrongdoing

An act or behavior that is illegal or immoral.

Illegal

Refers to actions that are prohibited by law or unauthorized by legal authority.

Regulatory

Pertaining to the process of establishing and enforcing rules and standards by government or organizational authorities.

Michigan Licensing Requirements

refers to the specific qualifications and criteria set by the state of Michigan for the issuance of professional licenses.