1. James is the sole owner of several parcels of rental real estate, and he actively participates in managing the properties. His total net loss from these activities in 2017 was $35,000 and his adjusted gross income for 2017 was $110,000. How much, if any, is the loss carryover to future years?

a. There is no carryover since the full loss is allowable for 2017.

b. None of the disallowed loss may be carried over.

c. $5,000

d. $10,000

e. $15,000

2. John died in 2017 with passive activity property having an adjusted basis of $50,000, suspended losses of $20,000, and a fair market value at the date of Johns death of $60,000. How much suspended loss is allowable as a deduction on Johns final Form 1040 return?

a. $10,000

b. $20,000

c. $0

d. None of the above is correct.

3. During 2017, Emmy Knight, a married taxpayer who files a joint return, had the following items of income and loss:

Salary income of $130,000 (as a television actor)

Rental real estate loss of $40,000

Emmy actively participates in the rental activity. Emmys adjusted gross income for 2017 is

a. $90,000

b. $105,000

c. $110,000

d. $120,000

4. Refer to the facts of question 32. How much, if any, is the loss carryover to future years?

a. $15,000

b. $25,000

c, $30,000

d, $40,000

34. A taxpayer is considered to be at risk under the at risk rules for

a. money borrowed by another for which payment is guaranteed by the taxpayer

b. money borrowed by the taxpayer from another who has an equity interest in the taxpayers business

c. qualified nonrecourse financing

d. None of the above is considered at risk.