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:

Left Frontal

refers to the frontal part of the left hemisphere of the brain, associated with functions like reasoning, problem-solving, and planning.

Right Temporal

Pertaining to the right side of the temporal lobe of the brain, associated with processing of auditory information and encoding memory.

Agnosia

A neurological disorder characterized by the inability to process sensory information properly, leading to difficulties in recognizing objects, people, sounds, shapes, or smells, despite having no significant memory loss.

Fluent Aphasia

A condition characterized by the ability to produce a smooth flow of speech but with a lack of meaning or with semantic errors, typically resulting from damage to the temporal lobe.