A Taxpayer Had the Following for the Current Year:

question 95

Multiple Choice

A taxpayer had the following for the current year:
?
$$\begin{array} { l c c c } & \text { Active } & \text { Portfolio } & \text { Passive } \\& \underline { \text { Income} } & \underline { \text { Income } } & \underline { \text { Income } } \\\text { Income } & \$ 75,000 & \$ 22,000 & \$ 55,000 \\\text { Deductions } & ( 45,000 ) & ( 16,000 ) & ( 110,000 ) \\\text { Income(Loss) } & \$ 30,000 & \$ 6,000 & \$ ( 55,000 ) \end{array}$$

I.If the taxpayer is a closely held corporation, taxable income from the three activities is income of $6,000.
II.If the taxpayer is an individual and the passive income is not related to a rental real estate activity, taxable income is $36,000.
?

• 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:

Percentage

A mathematical term that represents a number or ratio expressed as a fraction of 100.

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