[jeff]

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Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[UCMCPA]

and if he didn't dispose of it… would the income from partnership A of 20,000 be offset by the loss from partnership B?

FAR - 84
AUD - 94
REG - 86
BEC - 86

[UCMCPA]

@mehwish…

You are right, they are subject to that 2%. However, the problem doesn't tell you his AGI, so you can't calculate it. They are just asking WHERE the amount is deductible.

For AGI would be on the front of the 1040, the itemized deduction is on page 2 of the 1040.

FAR - 84
AUD - 94
REG - 86
BEC - 86

[UCMCPA]

@mehwish…

You are right, they are subject to that 2%. However, the problem doesn't tell you his AGI, so you can't calculate it. They are just asking WHERE the amount is deductible.

For AGI would be on the front of the 1040, the itemized deduction is on page 2 of the 1040.

FAR - 84
AUD - 94
REG - 86
BEC - 86

[Kenada]

Thats the part I am a bit sticky in.

I would say yes since they are both passive incomes, even though he did materially participate since there is a passive loss there, that can offset the passive income.

So I would say a cfwd of (40,000-20,000) = 20,000 cfwd.

If anyone is any wiser – please correct me.

FAR 05/27/14; 786/110 - Done !

[Kenada]

Thats the part I am a bit sticky in.

I would say yes since they are both passive incomes, even though he did materially participate since there is a passive loss there, that can offset the passive income.

So I would say a cfwd of (40,000-20,000) = 20,000 cfwd.

If anyone is any wiser – please correct me.

FAR 05/27/14; 786/110 - Done !

[Skrier]

@Mehwish…..the question is not asking how much is allowed, it is asking how they should be deducted. In this case D would be correct, they are itemized deductions and not adjustments for AGI. If they were asking how much is allowed as an itemized deduction then you apply the 2% of AGI. You have to be careful with the wording of the question, they like to throw you off that way. Good Luck!!

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Skrier]

@Mehwish…..the question is not asking how much is allowed, it is asking how they should be deducted. In this case D would be correct, they are itemized deductions and not adjustments for AGI. If they were asking how much is allowed as an itemized deduction then you apply the 2% of AGI. You have to be careful with the wording of the question, they like to throw you off that way. Good Luck!!

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Skrier]

You would not be able to offset the income from Partnership B against partnership A if the there was not a disposal since Partnership A, had material participation, therefore it is not considered a passive activity.

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Skrier]

You would not be able to offset the income from Partnership B against partnership A if the there was not a disposal since Partnership A, had material participation, therefore it is not considered a passive activity.

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Kenada]

Oh ok – so the partnership income in A will be added to the AGI and the loss in B will be carried forward until there is passive income in the future to offset it. Right ?

FAR 05/27/14; 786/110 - Done !

[Kenada]

Oh ok – so the partnership income in A will be added to the AGI and the loss in B will be carried forward until there is passive income in the future to offset it. Right ?

FAR 05/27/14; 786/110 - Done !

[Kenada]

For the year ending December 31, 2012, David Roth, a married taxpayer filing a joint return, reported the following:

Investment income from dividends and interest

$24,000

Long-term capital gains on stock held for investment

25,000

Investment expenses

4,000

Interest expense on funds borrowed in 2012

to purchase investment property

70,000

What amount can Roth deduct in 2012 as investment interest expense if he elects to pay his capital gains on stock at an ordinary tax rate?

A. $49,000

B. $20,000

C. $70,000

D. $45,000

FAR 05/27/14; 786/110 - Done !

[Kenada]

For the year ending December 31, 2012, David Roth, a married taxpayer filing a joint return, reported the following:

Investment income from dividends and interest

$24,000

Long-term capital gains on stock held for investment

25,000

Investment expenses

4,000

Interest expense on funds borrowed in 2012

to purchase investment property

70,000

What amount can Roth deduct in 2012 as investment interest expense if he elects to pay his capital gains on stock at an ordinary tax rate?

A. $49,000

B. $20,000

C. $70,000

D. $45,000

FAR 05/27/14; 786/110 - Done !

[UCMCPA]

49,000?

FAR - 84
AUD - 94
REG - 86
BEC - 86

[UCMCPA]

49,000?

FAR - 84
AUD - 94
REG - 86
BEC - 86

[Author]

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