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.