When Applying the Limitations of the Passive Activity Rules,a Taxpayer's

question 106

True/False

When applying the limitations of the passive activity rules,a taxpayer's AGI is classified into active income,portfolio income and passive income.For this purpose,portfolio income includes dividends,interest,annuities,and royalties.

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Definitions:

Fertilization Envelope

A protective layer that forms around the egg cell of some species immediately after fertilization, blocking additional sperm from entering the egg.

Plasma Membranes

The semipermeable membrane surrounding the cytoplasm of a cell, controlling the passage of substances in and out.

Blastula

An early stage of embryonic development in animals, characterized by a hollow sphere of cells surrounding a fluid-filled cavity.

Zona Pellucida

A thick, transparent membrane surrounding the plasma membrane of mammalian oocytes and early embryos.