Beginning in 2021, Which of the Following Taxpayers Is Subject

question 20

Multiple Choice

Beginning in 2021, which of the following taxpayers is subject to the excess business loss limitation?

• A) Delta Corporation, which incurred a $(2 million) business loss this year.
• B) Kenny, who is married filing a joint return and incurred a $(675,000) business loss this year.
• C) Linda, a single individual, who is a 50 percent partner in QT Partnership. This year, QT incurred a business loss of $(300,000).
• D) LetGo Partnership, which incurred a $(730,000) business loss this year.

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Definitions:

Depreciation

The method by which a business deducts the cost of tangible assets over time, recognizing the decrease in value of assets.

Taxed

Refers to income, property, or purchases on which tax is imposed by governmental authorities.

Depreciation

The reduction in the value of an asset over time, particularly for tax purposes.

Equipment

Tangible property used in operations, such as machinery or computer hardware, which can often be depreciated for tax purposes.