Pablo, Who Is Single, Has $95,000 of Salary, $10,000 of Income

question 98

Multiple Choice

Pablo, who is single, has $95,000 of salary, $10,000 of income from a limited partnership, and a $27,000 passive activity loss from a real estate rental activity in which he actively participates. His modified adjusted gross income is $95,000. Of the $27,000 loss, how much is deductible?

• A) $0
• B) $10,000
• C) $25,000
• D) $27,000
• E) None of the above

---

Definitions:

Price-earnings Ratio

A financial ratio that measures a company’s stock price in relation to its earnings per share, providing insight into the value the market places on the company's earnings.

Dividend Payout Ratio

A financial ratio that shows the portion of a company's earnings paid out to shareholders as dividends, expressed as a percentage of the company's total earnings.

Earnings per Share

A company's profit divided by its number of common outstanding shares.

Book Value per Share

This is the equity available to common shareholders divided by the number of outstanding shares, indicating the value per share if the company were liquidated.