10. William is single and owns a residential rental house. He actively participa

Question

10. William is single and owns a residential rental house. He actively participates in the rental property management During the tax year, he had a $9,500 rental loss. His only income during the tax year was $54,500 wages on his W-2. If he had no other income or losses for the tax year, what is the amount of total income that William should report on his return? a) $45,000 b) $49,750 c) $51,500 d) $54,500 11. William actively participates in his rental property. His W-2 wages are $120,000 and his rental loss is $20,000. What is the amount of total income that William should report on his tax return? a) $100,000 b) $110,000 c$105,000 d) $117,000

Explanation / Answer

10. Answer is option A $45,000

(income - loss) = (54500-9500)=45000

11. Answer is option A $100,000

Taxable income = wages - rental loss = 120000-20000 =100000

48. Answer is option C If any part of an underpayment is due to fraud, the entire underpayment will be subject to a penalty of up to 75% of the underpayment.

IRS has one of the most powerful tools in the form of civil fraud penalty. If a tax underpayment is due to fraud, and the penalty equals 75% of that portion of the taxpayer’s underpayment attributable to fraud.

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