Last year, Janet had a taxable income of $54,000 from her salary and investment assets. She owns 3 passive activities that generated a suspended loss of $(15,000) (PA2: $10,000; PA3: $5,000). In the next year, Janet has a taxable income from her salary and investment activities of $62,000. The results for her 3 passive activities for this year are as follows: Passive Activity 1 Passive Activity 2 Passive Activity 3 $15,000 $(8,000) $(2,000) Complete the statements below regarding Janet's passive losses. Note: Do not round your intermediate computations. Round your final answers to the nearest dollar. a. What is the effect of the passive activities on Janet's income? Janet's suspended loss is not permanently disallowed Consequently, her taxable income from salary and investment activities for this year is $ b. How much suspended loss does Janet have in each passive activity? Janet's suspended loss in each of her passive activities is computed as follows: PA2- × $10,000 = $ $25,000 PA3- × $10,000 $25,000
Last year, Janet had a taxable income of $54,000 from her salary and investment assets. She owns 3 passive activities that generated a suspended loss of $(15,000) (PA2: $10,000; PA3: $5,000). In the next year, Janet has a taxable income from her salary and investment activities of $62,000. The results for her 3 passive activities for this year are as follows: Passive Activity 1 Passive Activity 2 Passive Activity 3 $15,000 $(8,000) $(2,000) Complete the statements below regarding Janet's passive losses. Note: Do not round your intermediate computations. Round your final answers to the nearest dollar. a. What is the effect of the passive activities on Janet's income? Janet's suspended loss is not permanently disallowed Consequently, her taxable income from salary and investment activities for this year is $ b. How much suspended loss does Janet have in each passive activity? Janet's suspended loss in each of her passive activities is computed as follows: PA2- × $10,000 = $ $25,000 PA3- × $10,000 $25,000
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 34P
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Transcribed Image Text:Last year, Janet had a taxable income of $54,000 from her salary and investment assets. She owns 3 passive activities that generated a suspended
loss of $(15,000) (PA2: $10,000; PA3: $5,000). In the next year, Janet has a taxable income from her salary and investment activities of $62,000.
The results for her 3 passive activities for this year are as follows:
Passive Activity 1
Passive Activity 2
Passive Activity 3
$15,000
$(8,000)
$(2,000)
Complete the statements below regarding Janet's passive losses.
Note: Do not round your intermediate computations. Round your final answers to the nearest dollar.
a. What is the effect of the passive activities on Janet's income?
Janet's suspended loss is not permanently disallowed
Consequently, her taxable income from salary and investment activities for this year
is $
b. How much suspended loss does Janet have in each passive activity?
Janet's suspended loss in each of her passive activities is computed as follows:
PA2-
× $10,000 = $
$25,000
PA3-
× $10,000
$25,000
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