QUESTION 7

1. Brenda, a CPA, earns $200,000 from her practice. During the year, she paid $20,000 to acquire a 10% interest in a partnership that produced a $250,000 loss. Brenda's share of the loss is $25,000.

   If the activity is not classified as passive (Brenda is a material participant), What is Brenda's AGI?

   		$200,000
   		$180,000
   		$175,000
   		$0

1.5 points

QUESTION 8

1. When a passive activity is ultimately sold, all suspended losses and tax credits can be utilized even if the activity is sold at a loss.

   True

   False