During the Year, Aimee Reports $30,000 of Active Business Income

question 76

Multiple Choice

During the year, Aimee reports $30,000 of active business income, $15,000 of income from passive activity X, and a $25,000 loss from passive activity Y. Determine the tax consequences of these events.
I.The $15,000 income from activity X can offset $15,000 of the loss from activity Y.
II.Any passive loss that is not deducted in the current year is suspended.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Amino Acids

Building blocks of proteins, consisting of a basic amino group, an acidic carboxyl group, and a unique side chain.

RNA

Ribonucleic acid, a nucleic acid present in all living cells that plays a role in protein synthesis and the transmission of genetic information.

Translation

The process by which ribosomes synthesize proteins using the mRNA transcript as a template.

DNA Template

the strand of DNA that specifies the nucleotide sequence of a newly synthesized strand during replication or transcription.