Federal Taxation 34 Edition Chapter 11 Question Answer

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