Question
17. John is an individual and is not a real estate professional and does not materially participate in Partnership A or B. John is a
17. John is an individual and is not a real estate professional and does not materially participate in Partnership A or B. John is a limited partner in two real estate partnerships. Partnership A produces a passive loss of $3,000 (allocated to John). Partnership B produces passive income of $5,000 (allocated to John). How does John treat the income/(loss) on his tax return?
A. Include $2,000 net passive income in taxable income.
B. Recognize income of $5,000 and dont deduct losses of $3,000.
C. Recognize no income or loss.
D. Deduct $3,000 loss but dont recognize $5,000 income.
E. None of the above.
18. John is an individual and is a real estate professional and materially participates in Partnership A and B. John is a limited partner in two real estate partnerships. Partnership A produces a passive loss of $3,000 (allocated to John). Partnership B produces passive income of $5,000 (allocated to John). How does John treat the income/(loss) on his tax return?
A. Include $2,000 net passive income in taxable income.
B. Recognize income of $5,000 and dont deduct losses of $3,000.
C. Recognize no income or loss.
D. Deduct $3,000 loss but dont recognize $5,000 income.
E. None of the above.
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How To Avoid IRS Audits
Authors: Victor S. Sy, CPA, MBA, Allana Santos, Roger Oriel, Louie Gajardo, Malou Aguilar Bledsoe, RJ Oriel, Mark Xavier Bautista, Kenno Samulde, Morton D Rosenthal Esq.
1st Edition
1530746477, 978-1530746477
