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McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Edition 3ISBN: 9780078111068McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Edition 3ISBN: 9780078111068 Exercise 47
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?
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 Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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