Rinaldo owns 20% of Mahoney Company, a partnership. Rinaldo's adjusted basis in the partnership is $32,000 at the beginning of the current year. During the current year, Rinaldo receives a $10,000 cash distribution from the partnership. Mahoney Company reports a $200,000 operating loss for the current year. Which of the following statements is/are correct?
I. Rinaldo's maximum loss deduction is
limited to $22,000.
II. If Rinaldo is a material participant in Mahoney, he can deduct a $40,000 loss.
a. Only statement I is correct.
b. Only statement II is correct.
c. Both statements are correct.
d. Neither statement is correct.
a
You might also like to view...
If Joe's Safety Supply Inc. quotes an FOB destination price to a factory buying five hazardous waste disposal units, it indicates that:
A. Joe's Safety Supply will pay all freight charges. B. Joe's Safety Supply and the factory will split all shipping charges. C. the factory will assume complete responsibility for the units once they leave the Joe's Safety Supply loading dock. D. the factory will pay all freight charges. E. the factory will pay for any damage caused to the units while shipping.
Which of the following is considered the output in the systems thinking example of a DSS?
A. Goal Seeking B. Forecast C. Optimization D. TPS
Jack holds an ownership interest of 63% and Teresa holds an ownership interest of 37% in the J and T Partnership. This year, in order to further develop the business, Jack contributes an additional $6800 and Teresa contributes an additional $3200 to the partnership. Which of the following is TRUE of this scenario?
A) Either the total contribution of $10,000 or the contribution in relationship to the ownership interest ratio will be recorded. B) Only the total contribution of $10,000 will be recorded. C) Individual contributions of $6800 by Jack and $3200 by Teresa will be recorded. D) 63% of Jack's contribution and 37% of Teresa's contribution will be recorded.
A pedestrian trips and falls on a poorly-lighted sidewalk in front of Kate Geller's house and is injured. If the pedestrian sues for damages, which of the following parties would be liable to pay the damages?
A) the civic authority B) Kate Geller C) the residents' association of the locality D) the pedestrian