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:

Candy

A sweet tasting confection made from sugar and often combined with fruits, chocolate, or nuts.

Behavioral Economic Theories

A branch of economics that studies how psychological, social, and emotional factors affect economic decisions.

Rational Decisions

Choices made based on logical reasoning and objective analysis of available information and alternatives.

Behavioral Economics

A domain within economics focused on analyzing how elements such as psychology, cognition, emotions, culture, and societal factors impact choices related to the economy.