Lucy Owns and Actively Participates in the Operations of an Apartment

question 77

True/False

Lucy owns and actively participates in the operations of an apartment complex that produces a $50,000 loss during the year.Her modified AGI is $125,000 from an active business.Disregarding any at-risk amount limitation, she may deduct $25,000 of the loss this year, and the remaining $25,000 is a suspended passive activity loss.

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Definitions:

Outstanding Liabilities

Financial obligations that a company or individual has not yet settled.

Liquidated Assets

Assets that have been converted into cash or cash equivalents by selling them.

Partnership Liability

The legal obligations that partners in a business partnership are subject to, which can include debts, actions of other partners, and contractual obligations.

Considerable Damage

Significant physical or financial harm caused to property, individuals, or organizations.