1. A. Steve has AGI of $100K and he also owns a rental real estate property that has a taxable loss of $12,000. He actively participates in the activity. How much of the taxable loss from the rental activity can he deduct in the current year? B. Same facts as 1 except the AGI is $150K. How much of the taxable loss from the rental activity can he deduct in the current year? C. Same facts as 1 except the AGI is $130,000. How much of the taxable loss from the rental activity can he deduct in the current year? 2. Taxpayer has a passive activity conducted through a limited partnership investment. He tells you that his taxable income for the activity in the current year nets to zero but he received a cash distribution of $30,000. After talking with the accountant for the investment you learn the following: taxable income does net to zero but has several components including Income from the trade or business activity of $25,000 and a capital loss from holding publicly traded securities of $25,000. Tax basis for taxpayer at the beginning of the year was $60,000. Taxpayer also has a Passive Activity Loss carryover from the prior years of $15,000. a. What amount of Passive Income does the taxpayer report in the current year? b. Assuming the taxpayer has no other capital transactions what amount of the capital loss is deductible in the current year? c. Assuming that the taxpayer has sufficient AGI that he is above the NIIT threshold how much income (After considering a. and b.) is subject to the 3.8% NIIT d. Is the Cash distribution of $30,000 taxable? e. What is the taxpayers basis in the investment at the end of the year 3. If a taxpayer is a material participant in a partnership is her share of the trade or business income subject to self-employment tax (Yes/No)? 4. A taxpayer disposes of a long-held investment in a passive activity. The activity has accumulated over many years a passive loss. Further, upon disposal of the investment a Capital Loss results. a. What types of income can the accumulated passive loss offset in computing Taxable Income? b. What income can the Capital Loss offset in computing Taxable Income?