In the current year, White, Inc , earns $400,000 from operations and receives $36,000 in dividends and interest from various portfolio investments White also pays $150,000 to acquire a 20 interest in a passive activity that produces a $200,000 loss a Assuming that White is a personal service corpor...

a A personal service corporation is not allowed to offset passive losses against active or p ...

In the current year, White, Inc., earns $400,000 from operations and receives $36,000 in dividends and interest

Question:

In the current year, White, Inc., earns $400,000 from operations and receives $36,000 in dividends and interest from various investments. White also pays $150,000 to acquire a 20% interest in a passive activity that produces a $200,000 loss.
a. Assuming that White is a personal service corporation, how will these transactions affect its taxable income?
b. Same as (a), except that White is closely held but not a personal service corporation.
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...