The Rule of 70 Can Be Used to Calculate the

question 69

Multiple Choice

The Rule of 70 can be used to calculate the

• A)number of years it would take for the level of any variable to double.
• B)population growth rate per year.
• C)economic growth rate per year.
• D)70 per cent level of the economic growth rate.
• E)economic growth rate per month.

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Definitions:

Passive Activities

Economic activities in which the investor does not materially participate, and which often have different tax implications, such as rental property income.

Suspended Losses

Suspended Losses are losses from passive activities that exceed passive income, which cannot currently be deducted but can be carried forward to offset future passive income.

Net Passive Loss

The total loss from passive activities, exceeding the income from those activities, that cannot usually offset other types of income for tax purposes.

Not a Passive Activity

Activities that involve significant participation and management by the taxpayer, hence not qualifying for tax treatments as passive activities.