Question 1

The term "active participation" is used to determine:

Accepted Answer

A) Whether an activity is considered passive. 
B) Whether a taxpayer is a material participant. 
C) Whether a taxpayer is eligible for the $25,000 rental offset. 
D) None of these. 
A) Whether an activity is considered passive. 
B) Whether a taxpayer is a material participant. 
C) Whether a taxpayer is eligible for the $25,000 rental offset. 
D) None of these.

Question 2

Adjustments to AMTI can be either positive or negative.

Accepted Answer

A) True 
 B)False

Question 3

Sarah is single with no dependents.During 2017,Sarah has $86,000 of taxable income.She has $14,000 of positive AMT adjustments and $24,000 of tax preferences.Sarah does not itemize her deductions but takes the standard deduction.Calculate Sarah's AMTI.

Accepted Answer

AMTI for S

Question 4

Which of the following decreases a taxpayer's at-risk amount?

Accepted Answer

A) Cash distributions. 
B) Increases in liabilities. 
C) Income items. 
D) Cash contributions. 
A) Cash distributions. 
B) Increases in liabilities. 
C) Income items. 
D) Cash contributions.

Question 5

Generally,the gains and losses recognized for regular tax purposes are the same amount as the gains and losses recognized for AMT purposes.

Accepted Answer

A) True 
 B)False

Question 6

Paul invests $10,000 cash in an equipment leasing activity for a 15% ownership share in the business.The remaining 85% owner is Amanda.Amanda contributes $10,000 and personally borrows $75,000 that she also invests in the business.What are the at-risk amounts for Paul and Amanda? $\begin{array}{llll}&\text { Paul }&\text { Amanda }\
a.&\$  10,000 & \$  10,000 \
b.&\$  10,000 & \$  85,000 \
c.&\$  10,00 0 & \$  73,750 \
d.&\$ 21,250 & \$  73,750
\end{array}$

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 7

Catherine purchased furniture and fixtures (7-year property)for her shop for $80,000 in May.What AMT depreciation adjustment is required for the year?

Accepted Answer

A) $0. 
B) $2,864. 
C) $8,568. 
D) $11,432. 
A) $0. 
B) $2,864. 
C) $8,568. 
D) $11,432.

Question 8

Two equal partners involved in a passive activity with identical passive losses from that activity may be allowed to deduct different amounts of the losses on their own tax returns.

Accepted Answer

A) True 
 B)False

Question 9

A taxpayer's share of nonrecourse debt is considered an amount at-risk.

Accepted Answer

A) True 
 B)False

Question 10

Identify factors that increase or decrease the at-risk amount.

Accepted Answer

The at-risk amount i

Question 11

Cory sells his entire interest in a rental property in which he actively participated at a gain of $12,000.The activity has a current year loss of $4,800 and $16,000 in prior year suspended losses.During the year,Cory has $80,000 in salary.What is Cory's AGI for the year?

Accepted Answer

$71,200.The gain on the sale of $12,000

Question 12

The standard deduction is added back as a positive adjustment to AMTI.

Accepted Answer

A) True 
 B)False

Question 13

AMT depreciation of personal property is calculated using which method?

Accepted Answer

A) Straight-line method. 
B) 150% declining balance method. 
C) 200% declining balance method. 
D) Sum-of-the-years digits method. 
A) Straight-line method. 
B) 150% declining balance method. 
C) 200% declining balance method. 
D) Sum-of-the-years digits method.

The term "active participation" is used to determine:

Adjustments to AMTI can be either positive or negative.

Sarah is single with no dependents.During 2017,Sarah has $86,000 of taxable income.She has $14,000 of positive AMT adjustments and $24,000 of tax preferences.Sarah does not itemize her deductions but takes the standard deduction.Calculate Sarah's AMTI.

Which of the following decreases a taxpayer's at-risk amount?

Generally,the gains and losses recognized for regular tax purposes are the same amount as the gains and losses recognized for AMT purposes.

Catherine purchased furniture and fixtures (7-year property)for her shop for $80,000 in May.What AMT depreciation adjustment is required for the year?

Two equal partners involved in a passive activity with identical passive losses from that activity may be allowed to deduct different amounts of the losses on their own tax returns.

A taxpayer's share of nonrecourse debt is considered an amount at-risk.

Identify factors that increase or decrease the at-risk amount.

Cory sells his entire interest in a rental property in which he actively participated at a gain of $12,000.The activity has a current year loss of $4,800 and $16,000 in prior year suspended losses.During the year,Cory has $80,000 in salary.What is Cory's AGI for the year?

The standard deduction is added back as a positive adjustment to AMTI.

AMT depreciation of personal property is calculated using which method?

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

Partnership Taxation

Corporate Taxation

Filters

Exam 13: At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

The term "active participation" is used to determine:

Adjustments to AMTI can be either positive or negative.

Sarah is single with no dependents.During 2017,Sarah has $86,000 of taxable income.She has $14,000 of positive AMT adjustments and $24,000 of tax preferences.Sarah does not itemize her deductions but takes the standard deduction.Calculate Sarah's AMTI.

Which of the following decreases a taxpayer's at-risk amount?

Generally,the gains and losses recognized for regular tax purposes are the same amount as the gains and losses recognized for AMT purposes.

Catherine purchased furniture and fixtures (7-year property)for her shop for $80,000 in May.What AMT depreciation adjustment is required for the year?

Two equal partners involved in a passive activity with identical passive losses from that activity may be allowed to deduct different amounts of the losses on their own tax returns.

A taxpayer's share of nonrecourse debt is considered an amount at-risk.

Identify factors that increase or decrease the at-risk amount.

Cory sells his entire interest in a rental property in which he actively participated at a gain of $12,000.The activity has a current year loss of $4,800 and $16,000 in prior year suspended losses.During the year,Cory has $80,000 in salary.What is Cory's AGI for the year?

The standard deduction is added back as a positive adjustment to AMTI.

AMT depreciation of personal property is calculated using which method?

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

Partnership Taxation

Corporate Taxation

Filters