Josh Has Investments in Two Passive Activities

question 57

Multiple Choice

Josh has investments in two passive activities.Activity A (acquired three years ago) produces income of $30,000 this year, while Activity B (acquired two years ago) produces a loss of $50,000.What is the amount of Josh's suspended loss for the year?

• A)$0
• B)$18,000
• C)$20,000
• D)$50,000
• E)None of these

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Definitions:

Beta

An indicator of the degree to which a particular stock's movement is volatile compared to the general market, conveying the risk level of the stock relative to the market norm.

Risk-Free Rate

A return on an investment that is guaranteed not to result in financial loss, usually tied to state bonds.

Expected Return

The anticipated profit or loss from an investment, taking into consideration the potential outcomes and their probabilities.

Earnings Growth Rate

The rate at which a company's net income is expected to grow, often used to evaluate the future profitability of a business.