Bruce Owns a Small Apartment Building That Produces a $25,000

question 32

True/False

Bruce owns a small apartment building that produces a $25,000 loss during the year.His AGI before considering the rental loss is $85,000.Bruce must be a material participant with respect to the rental activity in order to deduct the
$25,000 loss under the real estate rental exception.

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Definitions:

Principal

The primary party involved in a contract or transaction, or the amount of money originally invested or loaned, before interest.

Agent

A person or entity authorized to act on behalf of another, usually in business transactions or negotiations.

Separate Accounts

Financial accounts that are segregated for individual investors, common in insurance and investment management.

Principal's Funds

Resources or capital belonging to the principal in a transaction or investment scenario, as opposed to the agent's or broker's funds.