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:

Political Office Seeker

An individual who campaigns for or aspires to hold a position in government.

Extensive Government Spending

A fiscal policy where the government spends significant resources on public services, programs, and projects to stimulate economic growth or achieve social objectives.

Externality Problems

Issues arising from the impact of one person's actions on the well-being of a bystander, which are not reflected in market prices.

Marginal Benefit

The extra pleasure or advantage obtained from acquiring or generating an additional unit of a product or service.