PRINCIPLES OF TAXATION F/BUS...(LL)
23rd Edition
ISBN: 9781260433197
Author: Jones
Publisher: MCG
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Chapter 16, Problem 9IRP
To determine
Explain the type of tax issue for the given situation through question format.
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Damarcus is a 50 percent owner of Hoop (a business entity). In the current year, Hoop reported a $100,000 business loss. Answer the following questions associated with each of the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.)
a. Hoop is organized as a C corporation and Damarcus works full-time as an employee for Hoop. Damarcus has a $20,000 basis in his Hoop stock. How much of Hoop’s loss is Damarcus allowed to deduct against his other income?
Allowable deduction of loss
Damarcus is a 50 percent owner of Hoop (a business entity). In the current year, Hoop reported a $100,000 business loss. Answer the following questions associated with each of the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.)
e. Hoop is organized as an LLC taxed as a partnership. Fifty percent of Hoop’s loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at-risk amount in his investment in Hoop. Damarcus reports $10,000 of income from a business activity in which he is a passive investor. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year?
Allowable deduction of loss
Cassie was an original investor in DEF LLC, a construction company. She owns a 20%
interest in the company for which she paid $200,000. This year, DEF did poorly and
had a taxable loss of $210,000. However, there was no need for additional
contributions
of capital. What is Cassie's basis in her interest in DEF at the end of this
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O $158,000.
O $0.
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$42,000.
Chapter 16 Solutions
PRINCIPLES OF TAXATION F/BUS...(LL)
Ch. 16 - Contrast the income tax consequences of the yields...Ch. 16 - Prob. 2QPDCh. 16 - Mrs. Buckley, age 74, has 100,000 in a certificate...Ch. 16 - Ms. Quint sadly concluded that a 7,500 debt owed...Ch. 16 - Prob. 5QPDCh. 16 - Prob. 6QPDCh. 16 - Discuss the potential effect of the passive...Ch. 16 - Prob. 8QPDCh. 16 - Prob. 9QPDCh. 16 - Prob. 10QPD
Ch. 16 - Prob. 11QPDCh. 16 - Prob. 1APCh. 16 - Mr. and Mrs. Lays taxable income is 679,000, which...Ch. 16 - Dianne Stacy, a single taxpayer, has 272,000...Ch. 16 - Prob. 4APCh. 16 - Mrs. Nunn, who has a 24 percent marginal tax rate...Ch. 16 - Refer to the preceding problem and assume that...Ch. 16 - Mrs. Yue, a resident of Virginia, paid 50,000 for...Ch. 16 - Ms. Pay, who has a 40.8 percent marginal tax rate...Ch. 16 - Mr. Jolly received the 100,000 face amount on the...Ch. 16 - Prob. 10APCh. 16 - Prob. 11APCh. 16 - Prob. 12APCh. 16 - Prob. 13APCh. 16 - Fifteen years ago, Mr. Fairhold paid 50,000 for a...Ch. 16 - Refer to the facts in the preceding problem....Ch. 16 - Prob. 16APCh. 16 - Prob. 17APCh. 16 - Three years ago, Mrs. Gattis loaned 10,000 to Mr....Ch. 16 - Prob. 19APCh. 16 - Prob. 20APCh. 16 - Mrs. Beard recognized a 12,290 capital loss on the...Ch. 16 - Prob. 22APCh. 16 - Prob. 23APCh. 16 - Mr. and Mrs. Revel had 206,200 AGI before...Ch. 16 - Prob. 25APCh. 16 - Mr. Fox, a single taxpayer, recognized a 64,000...Ch. 16 - Mrs. Cox, a head of household, earned a 313,000...Ch. 16 - Prob. 28APCh. 16 - Prob. 29APCh. 16 - Mr. Dunn, who has a 32 percent marginal rate on...Ch. 16 - Prob. 31APCh. 16 - Prob. 32APCh. 16 - Prob. 33APCh. 16 - Prob. 34APCh. 16 - Prob. 35APCh. 16 - Prob. 36APCh. 16 - Ms. Turney owns a one-half interest in an...Ch. 16 - Prob. 38APCh. 16 - Prob. 39APCh. 16 - Prob. 40APCh. 16 - Mr. Erwins marginal tax rate on ordinary income is...Ch. 16 - Prob. 42APCh. 16 - Prob. 43APCh. 16 - Prob. 44APCh. 16 - Prob. 45APCh. 16 - Mrs. Wolter, an unmarried individual, owns...Ch. 16 - Prob. 1IRPCh. 16 - Prob. 2IRPCh. 16 - Prob. 3IRPCh. 16 - Prob. 4IRPCh. 16 - Prob. 5IRPCh. 16 - Two years ago, Ms. Eager loaned 3,500 to her...Ch. 16 - Prob. 7IRPCh. 16 - This year, Ms. Tan had a 29,000 capital loss...Ch. 16 - Prob. 9IRPCh. 16 - Mr. Pugh has a 7,900 adjusted basis in his limited...Ch. 16 - Prob. 11IRPCh. 16 - Mr. Durst died on March 8. His taxable estate...Ch. 16 - Prob. 13IRPCh. 16 - Prob. 1RPCh. 16 - Prob. 2RPCh. 16 - Prob. 1TPCCh. 16 - Ms. Kaspari, who has a 24 percent marginal rate on...Ch. 16 - Prob. 3TPCCh. 16 - Prob. 4TPC
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Similar questions
- Damarcus is a 50 percent owner of Hoop (a business entity). In the current year, Hoop reported a $100,000 business loss. Answer the following questions associated with each of the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.) c. Hoop is organized as an LLC taxed as a partnership. Fifty percent of Hoop’s loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at-risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year? Allowable Deduction Loss?arrow_forwardDamarcus is a 50 percent owner of Hoop (a business entity). In the current year, Hoop reported a $100,000 business loss. Answer the following questions associated with each of the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.) b. Hoop is organized as an LLC taxed as a partnership. Fifty percent of Hoop’s loss is allocated to Damarcus. Damarcus works full-time for Hoop (he is not considered to be a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at-risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year? Allowable Deduction Loss?arrow_forwardJosie Inc is an S Corporation and Josie owns 100 % of its stock. On April 1 2019 Josie sold 25 % of her shares to the LJ General Partnership. ( April 1 st is the 91 st day of Josie , Inc's taxable year. ) As a result of this transaction, Josie Inc's S Corp election is terminated. In 2019 , Josie Inc generated $730,000 of taxable income. How is the 2019 taxable income reported on Josie Inc's 2019 tax return(s) ?arrow_forward
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