In 2012, Amber Had a $100,000 Loss on a Passive

question 111

Multiple Choice

In 2012, Amber had a $100,000 loss on a passive activity.None of the loss is attributable to AMT adjustments or preferences.She has no other passive activities.Which of the following statements is correct?

• A)In 2012, Amber can deduct $100,000 for regular income tax purposes and for AMT purposes.
• B)Amber will have a $100,000 tax preference in 2012 as a result of the passive activity.
• C)For regular income tax purposes, none of the loss is allowed in 2012.
• D)In 2012, Amber will have a positive adjustment of $25,000 as a result of the passive loss.
• E)None of the above.

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Definitions:

Mnemonic Device

A technique used to improve memory by associating complex information with simple, easily recallable aids like patterns, phrases, or images.

Peg-Word Method

A mnemonic strategy that involves linking numbers with items that rhyme with or resemble the numbers to remember a list of items.

Anterograde Amnesia

A condition impairing the ability to form new memories following the onset of an amnesia-causing event, leaving intact the capability to remember the past before the event.

Hyperspecific

Refers to being extremely or excessively precise or detailed, often beyond what is necessary or useful.