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McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
Edition 3ISBN: 9780077924522McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
Edition 3ISBN: 9780077924522 Exercise 18
Damarcus is a 50% owner of Hoop (a business entity). In the current year, Hoop reported a $100,000 business loss. Answer the following questions associated with each of the following alternative scenarios.
a. Hoop is organized as a C corporation and Damaracus works full time as an employee for Hoop. Damarcus has a $20,000 basis in his Hoop stock. How much of Hoop's loss is Damarcus allowed to deduct this year
b. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus works full time for Hoop (he is not considered to be a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 lass allocated to him by Hoop is Damarcus allowed to deduct this year
c. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 lass allocated to him by Hoop is Damarcus allowed to deduct this year
d. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus works full time for Hoop (he is not considered to be a passive investor in Hoop). Damarcus has a $70,000 basis in his Hoop ownership interest and he also has a $70,000 at risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year
e. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $70,000 basis in his Hoop ownership interest and he also has a $70,000 at risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year
f. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at risk amount in his investment in Hoop. Damarcus reports $10,000 of income from a business activity in which he is a passive investor. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year
a. Hoop is organized as a C corporation and Damaracus works full time as an employee for Hoop. Damarcus has a $20,000 basis in his Hoop stock. How much of Hoop's loss is Damarcus allowed to deduct this year
b. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus works full time for Hoop (he is not considered to be a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 lass allocated to him by Hoop is Damarcus allowed to deduct this year
c. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 lass allocated to him by Hoop is Damarcus allowed to deduct this year
d. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus works full time for Hoop (he is not considered to be a passive investor in Hoop). Damarcus has a $70,000 basis in his Hoop ownership interest and he also has a $70,000 at risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year
e. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $70,000 basis in his Hoop ownership interest and he also has a $70,000 at risk amount in his investment in Hoop. Damarcus does not report income or loss from any other business activity investments. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year
f. Hoop is organized as a LLC. Fifty percent of Hoop's loss is allocated to Damarcus. Damarcus does not work for Hoop at all (he is a passive investor in Hoop). Damarcus has a $20,000 basis in his Hoop ownership interest and he also has a $20,000 at risk amount in his investment in Hoop. Damarcus reports $10,000 of income from a business activity in which he is a passive investor. How much of the $50,000 loss allocated to him by Hoop is Damarcus allowed to deduct this year
Explanation
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In the current scenario of Damascus, bel...
McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
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