Why did Congress enact restrictions and limitations on losses from passive activities?

What will be an ideal response?


If there were no restrictions or limitations on passive losses many taxpayers would engage in passive activities for a tax shelter. These tax shelters, lacking economic substance, would create deductions and credits from passive activities to offset and sometimes eliminate income from active business activities, which is what Congress is trying to prevent.

Business

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Indicate whether the statement is true or false

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All variable costs except manufacturing costs are subtracted from sales to determine the total contribution margin

Indicate whether the statement is true or false

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Which of the following statements about employment interviews is FALSE?

a. Preparation for the interview includes researching the organization. b. A self-analysis of your own strengths, weaknesses, accomplishments, and challenges should be undertaken prior to interviewing. c. You should go to the interview prepared to both answer and ask questions. d. Most questions asked in interviews can be answered from the résumé.

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The provisions of the Communications Decency Act were deemed unconstitutional as they repressed the speech that adults have the right to make

Indicate whether the statement is true or false

Business