When Kenneth Martin died, his basis in his partnership interest was $48,500, and his unused passive activity losses for the activity were $9,500. The property was transferred to Kenneth's son, Mark, with a fair market value of $53,500. What is Kenneth's deduction for unused losses on his final return?

$4,500

$5,000

$9,500

$13,500

In 2015, Raymona Lockhart had $3,500 of unallowed passive losses due to the unallowed passive loss limitations. In 2016, Amber had passive income of $2,000 from the same passive activity. How would Raymona treat the prior-year unallowed passive losses of $3,500 in 2016?

Raymona can deduct the entire prior-year passive loss of $3,500 in 2016.

Raymona can deduct $2,000 of the prior-year passive loss in 2016 and carry $1,500 of the prior-year passive loss to future years.

Raymona can deduct $1,500 of the prior-year passive loss in 2016 and carry $2,000 of the prior-year passive loss to future years.

Raymona cannot deduct the $3,500 of prior-year passive losses in 2016.

In 2016, Jimmy Hammond was a limited partner in KWA Partnerships. He had $7,000 of unallowed passive losses due to the unallowed passive loss limitations. Going forward, how could Jimmy Hammond deduct the $7,000 of unallowed passive loss?

Passive losses are only allowed to be deducted in the year incurred, and cannot be carried forward to future years.

Unallowed passive losses may be deducted in the year that the taxpayer disposes of their interest in the entity.

Unallowed passive losses may be deducted from future passive income from the passive activity.

Both B and C are correct.

Which of the following situations does NOT describe a material participant?

Mark Trent participated in Activity J for 780 hours.

Marcus Smith i did not participate in Activity Q, a law firm. However, he was a full-time employee at the firm from 2006 to 2015.

Ronald Clark participated in Activity G for 210 hours, more than any other individual.

Janet Samson participated in Activity A for 20 hours, Activity B for 80 hours, and Activity C for 75 hours.