Business
Business, 05.05.2020 09:14, mickellife4659

Sophie is a 10 percent owner in Canine Connection, LLC, a day-care center for dogs. She is also a 15 percent owner in Little Laughter, LLC, a successful children’s clothing store. She does not materially participate in either business. Her at-risk and loss/income for the current year is as follows:
i. Canine Connection-At-risk = $140,000; Loss of $300,000
ii. Little Laughter-At-risk = $50,000; Income of $$130,000
She also has wage income of $80,000 and capital gain income of $30,000.
Required:
1. Which of the followingstatements is true?
a. The loss suspended because of the at-risk rules is $110,000 and the loss suspended because of the passive activity loss rules is $60,000.
b. The loss suspended because of the at-risk rules is $110,000 and the loss suspended because of the passive activity loss rules is $0.
c. The loss suspended because of the at-risk rules is $160,000 and the loss suspended because of the passive activity loss rules is $10,000.
d. The loss suspended because of the at-risk rules is $160,000 and the loss suspended because of the passive activity loss rules is $80,000.

answer
Answers: 1

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Sophie is a 10 percent owner in Canine Connection, LLC, a day-care center for dogs. She is also a 15...

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