Simon Is a 30% Owner (Member)of Real Properties R Us,LLC

question 128

Multiple Choice

Simon is a 30% owner (member) of Real Properties R Us,LLC (RPRU) .During the current tax year,RPRU reported a loss from rental real estate activities of ($150,000) which is treated as a passive loss.Simon is a material participant in RPRU.His modified AGI is $122,000.In addition,Simon has passive income from other sources of $15,000.Assuming Simon meets the basis and at risk limitations,what amount of the RPRU loss may Simon deduct under the passive loss rules?

• A)$0.
• B)$15,000.
• C)$24,000.
• D)$29,000.
• E)$44,000.

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Definitions:

Manufacturing Overhead

Manufacturing overhead includes all indirect costs associated with the production process, such as utilities, maintenance, and salaries of non-direct labor employees.

Ceramic Tile

A durable, hard flooring material made from clay that has been fired in a kiln, commonly used for floors, walls, and backsplashes.

Fixed Expense

An expense that does not change with the level of production or sales, such as rent, salaries, and insurance.

Administrative Expense

Costs related to the general administration of a business, including office supplies, salaries of administrative personnel, and utilities.