A Taxpayer's At-Risk Amount in an Activity Is Increased By

question 20

Multiple Choice

A taxpayer's at-risk amount in an activity is increased by:

• A) a reduction in the amount of debt related to the activity that the taxpayer is responsible for paying.
• B) cash contributions to the activity.
• C) cash distributions from the activity.
• D) a reduction in the amount of debt related to the activity that the taxpayer is responsible for paying and cash contributions to the activity.
• E) a reduction in the amount of debt related to the activity that the taxpayer is responsible for paying and cash distributions from the activity.

---

Definitions:

Accounts Affected

The specific accounts in the general ledger that are impacted by financial transactions.

Financial Statement

A summary report that quantitatively describes the financial health of a company, including income statements, balance sheets, and cash flow statements.

Normal Balance

The normal balance is the side (debit or credit) of an account that is normally expected to have a higher balance.

Financial Statement

An officially maintained account of the economic engagements and financial circumstances of a company, an individual, or a variant entity.