What is the correct order in which the limitations on potential losses must be applied for $2022?$

First, basis; second, at$-$risk; third, passive activity; fourth, excess business loss.

First, at$-$risk; second, basis; third, excess business loss; fourth, passive activity.

First, passive activity; second, excess business loss; third, basis; fourth, at$-$risk.

First, basis; second, passive activity; third, excess business loss; fourth, at$-$risk.

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Question $12$ of $30.$

Which item on a Schedule K$-1($Form $1065)$ would subject the partner to self$-$employment tax?

Interest.

Royalties not derived in the ordinary course of a trade or business.

Ordinary income, but only if the partner was a limited partner.

Guaranteed payments for services rendered by a partner to a partnership.

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Question $13$ of $30.$

Hale receives a Schedule K$-1$ from a family business that he does not actively participate in$.$ On it$,$ he shows interest income of $$245$ and dividends of $$681.$ The Schedule K$-1$ also includes $$275$ in annuities. Hale also has a passive loss of $$1,721$ from another business. Can he offset the loss with the Schedule K$-1$ income?

Yes, he can offset $$926($the interest and dividends$)$ of the loss using the interest and dividends, but not the $$275($annuities$).$

No$,$ he cannot offset passive losses with portfolio income.

Yes, he can offset $$1,201$ of the loss using the investment income.

No$,$ he can only use investment income against passive losses when the income is greater than the loss.