4.T purchased a limited partnership interest in 2005. T is a passive investor. D

Question

4.T purchased a limited partnership interest in 2005. T is a passive investor. During the current year, the partnership's loss is $20,000. Which of the following statements is true? a. If T is an individual, she may deduct her share of the loss to the extent of any dividend income that she receives because losses on passive investments are deductible to the extent of income on investments b. If T is an individual, she may deduct the loss, as long as the partnership was engaged in real estate rental activities and her share of the loss is less than $25,000 c. If T is a corporation, it may deduct its share of the loss if all of T's stock is held by Ms. Tee. (The corporation, which manufactures gift wrap paper, had earnings from operations during the year greater than $20,000.) d. All of the above are true e. None of the above is true

Explanation / Answer

In this case , T is a passive investor.

However share in LLP will go reduce the balance of capital accounts in partnership. So the loss on the partnership interest cannot be set off against the dividend income from investments.

Hence Ans is E , as none of the above is true.

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.