In 2011,Judy Invested $200,000 for a 25% Interest in a Limited

question 29

Multiple Choice

In 2011,Judy invested $200,000 for a 25% interest in a limited liability company (LLC) involved in an activity in which she is a material participant.The LLC reported losses of $680,000 in 2011 and $360,000 in 2012 with Judy's share being $170,000 in 2011 and $90,000 in 2012.How much of the losses can Judy deduct?

• A) $0 in 2011; $0 in 2012.
• B) $170,000 in 2011; $0 in 2012.
• C) $170,000 in 2011; $30,000 in 2012.
• D) $170,000 in 2011; $90,000 in 2012.
• E) None of the above.

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Definitions:

Downsizing Strategy

Strategy to improve an organization's efficiency by reducing the workforce, redesigning the work, or changing the systems of the organization.

Senior Management

The highest level of management within an organization, responsible for strategic decision-making and overall leadership.

Interactional Justice

The interpersonal treatment employees receive during the implementation of the downsizing decision.

Downsizing Decision

The process undertaken by a company to reduce its workforce to improve efficiency or reduce costs.