20-19Under Passive Loss Limitation Rules the Limit of Annual Operating

question 28

Multiple Choice

20-19.Under passive loss limitation rules the limit of annual operating losses from a commercial real estate property that can be used to offset other positive income for the sole owner is:

• A) $100,000
• B) $75,000
• C) $50,000
• D) $25,000

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Definitions:

Unearned Revenue

Money received by a business for services or products yet to be delivered or provided; considered a liability until the service or product is delivered.

Utilities Expense

The cost incurred by a business for the consumption of utilities services like electricity, gas, water, and sewage.

Accounts Payable

Liability accounts representing the amounts owed by a company to its suppliers or creditors for goods and services received.

General Journal

A journal used in accounting that records all day-to-day financial transactions in chronological order.