1. The passive activity loss rules generally apply to

a. individuals

b. estates

c. trusts

d. closely held C corporations

e. all of the above

2. The passive activity loss rules limit use of losses resulting from or attributable to:

a. trade or business activities in which the taxpayer does not materially participate

b. interest, annuities, royalties, and C corporation and S corporation dividends

c. nonpassive activities

d. all of the above

e. (a) and (b) above

3. Assume that during 2018, Hugh U. You will have the following income and loss:

Activity X $50,000 net loss

Activity Y $20,000 net income

Both Activity X and Activity Y are nonrental passive activities as to Mr. You. Mr. You purchased Activity X in 1988 and Activity Y in 1994. How much, if any, is the passive loss, from these activities that Mr. Hughes may utilize in computing his 2018 adjusted gross income?

a. $50,000

b. $30,000

c. $3,000

d. $0

e. $20,000

4. Assume that during 2018, Henry will have the following income and loss:

Activity X..$50,000 net loss

Activity Y..$20,000 net income

Both Activity X and Activity Y are nonrental passive activities as to Henry. Henry purchased Activity X in 1988 and Activity Y in 1994. How much, if any, passive activity loss will be carried over to 2019?

a. $50,000

b. $30,000

c. $20,000

d. $0

5. 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 modified adjusted gross income for 2017 was $110,000. How much, if any, is the allowable deduction for 2017 for the loss from these properties?

a. 0

b. $10,000

c. $20,000

d. $25,000