Catfish, Inc

question 64

Multiple Choice

Catfish, Inc., a closely held corporation that is not a PSC, owns a 45% interest in Trout Partnership, which is classified as a passive activity.Trout's taxable loss for the current year is $250,000.During the year, Catfish receives a $60,000 cash distribution from Trout.Other relevant data for Catfish are as follows. How much of Catfish's share of Trout's loss may it deduct in calculating its taxable income?

• A)$0
• B)$20,000
• C)$45,000
• D)$112,500

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Definitions:

Feedback Control System

A system that regulates its operation by comparing its output with a desired goal or standard and making adjustments based on that feedback.

End Results

The final outcomes or consequences of actions, projects, or processes, often used to evaluate success or effectiveness.

Work Inputs

The effort, energy, and resources employed by workers to accomplish tasks and produce goods or services.

Comparison Methods

Techniques used in analysis that involve evaluating two or more objects, ideas, or data sets to identify their differences, similarities, or both.