During the Current Year, Ethan Performs Personal Services as Follows

question 40

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 and that 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 are 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 these.

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Definitions:

Weathering

The process by which rocks and minerals break down into smaller pieces by physical, chemical, or biological means, leading to the formation of soil and sediments.

Bedrock

The solid rock underlying loose deposits such as soil or alluvium, often exposed at the Earth's surface or underlying the soil layer.

Sediment

Particles of organic or inorganic matter that accumulate in a loose, unconsolidated form, often deposited by water, wind, or ice.

Tectonic Forces

the forces generated by the movements of Earth's lithospheric plates, responsible for geological features and activities.