Federal Taxation 34 Edition Chapter 11 Question Answer

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11-37
Russell does not have a material participation therefore in 2009; Russell cannot deduct any of the passive loss. The $40,000 loss incurred in 2009 from the partnership will be suspended and carried forward to 2010 where it offsets the income of $22,000. After 2010, $18,000 of the 2009 passive loss remains suspended. 11-42

The net passive activity loss will be (40,000)
Activity A……………………………… $ 10,0000
Activity B……………………………… $(5,000)
Activity C……………………………….$(25,000)
Activity D………………………………..$(20,000)
Net passive loss…………………..$ (40,000)
The $10,000 gain from activity A will be allocated to cover the loss for Activity B,C,D and the allocated loss will be Activity B………$(4,000)
Activity C………$(20,000)
Activity D………$(16,000)
Net gain from the sale of activity D is $19,000
The suspended loss of $ (16,000) and the current loss of $(1,000) will be offset by the gain of $ 19,000 and the remaining (2,000) will offset the suspended loss from activity A and activity B. 15-32

A. Calculation of regular Income tax liability
Tax on $ 160,000| |
On $ 82,400| $ 16,781|
On $ 77,600 *28%| 21,728|
| $ 38,509|

Calculation of AMT
Taxable Income| $ 160,000|
Positive AMT adjustment| 40,000|
Tax preference| 35,000|
AMTI| $ 235,000|
Exemption($ 46,700-25% ($235,000-$112,500)| (16,075)| AMT Base| $ 218,925|
Rate| |
26% * $ 175,000 $ 45,500| |
28% 8 $ 43,925 12, 299| |
AMT| $ 57,799|
Income tax| (38,509)|
AMT| $ 19,290|

B The total tax liability is $ 57,799
$ 38,509 + $ 19,290 = $ 57,799

15-37
2010 regular income tax deduction
2010 regular income tax deduction | $ 150,000|
2010 AMT deduction ($ 150,000 /3)| $ (50,000)|
Positive AMT| $ 100,000|
| |
2011 regular income tax deduction| $ 90,000|
2011 AMT deduction [($ 150,000/3)+(90,000/3)]| $ (80,000)| Positive AMT| $ 10,000|

15-46
a. Medical...
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